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March 14, 2014

wells fargo's institutional fraud

Strange place to see this story break, the New York Post, and it's certainly flown under the radar, but a filing in a local foreclosure case alleges that not only did Wells Fargo falsify foreclosure filings, but they had basically written such falsification into a manual.

Oh it's a bit dry, but this explains the whys and wherefores pretty thoroughly:

Attorneys, forensic accountants and consumer advocates have long suspected that banks were systematically creating improper documents to prove ownership of loans. Foreclosure defense lawyers use the term 'ta-da' endorsement to describe situations in which they say a document appears, as if by magic, in the bank's possession as needed in a foreclosure case--even though the proper endorsement was not included in the original foreclosure filing. It might sound like a technicality, but correct proof of ownership lies at the heart of the foreclosure crisis for securitized loans, which were sold by the lender that originally issued the mortgage. To legally transfer a securitized loan, the endorsements and allonges have to be created in a very specific way and within a specific time frame, usually 90 days after a residential mortgage trust closes. For many loans in foreclosure now, which were originated years ago and then sold, it's way too late to correct incomplete documents, experts said.

If the allegations in Tirelli's court filing are true, this manual represents the first time 'ta-da' endorsements are "being described and admitted to be a procedure" at a major bank, as Tirelli claimed to The Post.

It's increasingly in the rear view mirror, and we have interesting new challenges facing us, but it is becoming clearer that The Banks were not just clueless and reckless, but they were also engaging in criminal activity to prop up their bottom line.

This is how the free market solves everything: by incentivizing short-cuts to the point of breaking the law.

Posted by mrbrent at 10:16 AM

March 13, 2014

eduardo porter and thomas piketty on inequality

I was gonna link up this column by Eduardo Porter, as I found it interesting, but in the process of digging up the link I found this exclusive-to-the-web (sigh) interview with the subject of the column, author Thomas Piketty, whose new book Capital In The Twenty-First Century argues against the tenet of the free market economy that states that the capitalism will tend to equalize the distribution of wealth over time.

Dry stuff, right?  Come on, this is class warfare at its finest — there is an Actual Economist who is not Paul Krugman who has done some detailed research and found that the natural tendency of the growing inequality is to keep on growing.  Actually, this paragraph from Porter's column sums it up best:

This means that the income from wealth usually grows faster than wages. As returns from capital are reinvested, inherited wealth will grow faster than the economy, concentrating more and more into the hands of few. This will go on until capital owners decide to consume most of their income and stop reinvesting as much.

And as far as the interview with Piketty goes, it is definitely above a beginner's level of macroeconomics (and therefore justly over my head), but it's still worth your time to work your way through it:

Q. Might inequality in the United States be less damaging than it is in Europe because the very rich were not born into wealth, but earned their money by creating new products, services and technologies?

A. This is what the winners of the game like to claim. But for the losers this can be the worst of all worlds: They have a diminishing share of income and wealth, and at the same time they are depicted as undeserving.

This may seem like another example of liberal whinging on my part, but inequality will eventually suck for the oligarchy: they may have "captured" the political process for now, but history shows us that if rising inequality is not addressed politically, it will at some point be addressed non-politically.  Which is a polite term for war, unrest, etc.

Plus also I should mention that inequality sucks for the majority of the population at the bottom end of it, stuck without opportunity for advancement in a world that tells them that's it's their own damn fault for not being a billionaire.

Posted by mrbrent at 10:31 AM

March 12, 2014

how many fracking earthquakes is too many?

That I would be opposed to fracking is probably no surprise.  I'm not surprised, at least.  The dangers of fracking are so well documented that I don't even have to hyperlink them: stinking, flammable drinking water being probably the most widely known.  I'm also partial to simple malfeasance on the part of the energy companies doing the fracking, like leaving a well behind with a giant uncovered wastewater pond on the property — "Sorry, nothing in our lease says we have to take it with us."

But a really good reason to be leery of hydraulic fracturing, as it is called in polite company, is earthquakes!

Now I'm sure every wannabe supervillain our there is keenly interested in this, but here's the logic behind it in layman's terms: the crust of the earth is not one contiguous sheet of rock but rather a bunch of pieces of rock all squished up together, and earthquakes are what happens when the pieces of rock slip for some reason.  And if you are forcing water and chemicals way down there, where the pieces of rock meet each other... well let's just say that an earthquake seems to easily clear the bar of unintended consequence.  (And there's scuttlebutt that fracking might have caused this big one, but scuttlebutt is tough to enter into a court of law, let alone the court of public opinion.)

So yesterday the State of Ohio suspended some fracking production near the Pennsylvania border after a couple of small quakes were reported.  And the news story is your standard he said/she said when it comes to whether or not fracking can cause temblors, but there is this paragraph:

There have been only a few instances -- in British Columbia, England and south-central Oklahoma -- in which the fracking itself was thought to have induced quakes large enough to be felt.

Well then I guess the question that serious people are asking when it comes to the proliferation of fracking is, "How many earthquakes is too many earthquakes?"

And the fact that serious people, grown-ups, can have thoughts like that right there is exactly why I gave up comedy.

Posted by mrbrent at 10:10 AM