Saturday, November 13, 2010

MERS Whitewash Bill Already in the Works, says CNBC

A bill that will legalize the fraud, in other words. And it may be passed during the lame duck session, says John Carney, senior editor at CNBC:

When Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country.

The system is known as MERS, the acronym for a private company called Mortgage Electronic Registry Systems. Set up by banks in the 1997, MERS is a system for tracking ownership of home loans as they move from mortgage originator through the financial pipeline to the trusts set up when mortgage securities are sold.

The system has come under scrutiny by critics who charge MERS with facilitating slipshod practices. Recently, lawyers have filed lawsuits claiming that banks owe states billions of dollars for mortgage recording fees they avoided by using MERS.

... Perhaps even more devastatingly, some critics say that sloppiness at MERS—which has just 40 full-time employees—may have botched chain of title for many mortgages. They say that MERS lacks standing to bring foreclosure actions, and the botched chain of title may cast doubts on whether anyone has clear enough ownership of some mortgages to foreclose on a defaulting borrower. The problems with MERS system led JPMorgan Chase [JPM 39.61 -0.41 (-1.02%) ] CEO Jamie Dimon to stop using MERS for foreclosures in 2008.

Now it appears that Congress may attempt to prevent any MERS meltdown from occurring. MERS is owned by all the biggest banks, and they certainly do not want it to be sunk by huge fines. Investors in mortgage-backed securities also do not want to see the value of their bonds sink because of doubts about the ownership of the underlying mortgages.

So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimate mortgage transfers conducted through MERS private database.

Self-styled consumer advocate Neil Garfield says the legislation is already being drafted:
After years of negative judicial decisions about the use of a straw-man on mortgages, MERS was about to lose its existence as well as its credibility. But now all of that is set to change as Wall Street money is pouring into the coffers of those who are receptive (i.e., almost everyone in Congress). The legislation is already being drafted under the interstate commerce clause to ratify MERS and everything it did retroactively. It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law. This information is corroborated by several people who are in sensitive positions — persons who would be the first to know such proposals. Fortunately, there are some people in Washington who have a conscience and do not want to see this happen.

Garfield is overstating things a bit. In truth, the results of the legal challenges to MERS have been mixed. But it is very plausible that the banks might want to put to rest any ongoing uncertainty about the legality of MERS. I wouldn't be at all surprised if Congress manages to pass a bill that bails MERS out of its legal issues.

Regulatory capture by the Wall Street banks is so complete that it won't surprise a bit if Congress passes this kind of bill and President Obama signs the bill into the law of the land, thus legitimizing FRAUD and PONZI to save the banks and big investors who bought MBS created out of numerous REMICs, which, thanks to MERS, may not have had any loans properly transferred to them.

In other words, these REMICs, set up by Fannie and Freddie and big Wall Street banks and managed by big Wall Street banks, may have "naked shorted" the securities, when there was no loan to supposedly "back" those securities. They simply hoped no one would notice, and that happy housing bubble would go on forever (until Goldman Sachs showed up with John Paulson).

Their plan during the housing bubble years, in retrospect, was to grow as big as possible so that when the proberbial sh_t hit the fan they would be protected as "Too Big To Fail" banks. Fraudulent mortgage inducement to suck in borrowers, fraudulent securitization and selling of securities with no backing, fraudulent foreclosures, they must have figured, would be all forgiven by the government because the mess would be so gigantic that the entire financial system would collapse. Just to make sure, the bankers stuffed their own people into key government agencies as well as hiring ex-government regulators.

So far, they have been absolutely correct, and their regulatory capture has been working like a charm.

If the captured Congress and the White House dare legitimize, retroactively to boot, a fraud operation like MERS, there go the financial markets. There goes the country, probably. Restore the trust and confidence in the markets? My a_s.

Instead of bankers hanging from the numerous lamp posts on Wall Street, we will see these bankers get away with theft - stealing homes from defaulting homeowners even though they don't have any legal standing to foreclose, but so what, if the government changes the law and legalizes fraud, they don't need to prove anything. Just as they had planned all along.

And we are told to blame "deadbeat" homeowners. Because, as Matt Taibbi said at the end of his latest article on 'Foreclosuregate',
Because in America, it's far more shameful to owe money than it is to steal it.

Friday, November 12, 2010

Wayne Madsen: China Fired Missile Seen in So-Cal

Wayne Madsen Report via

Pentagon and its embedded media covering up Chinese show of force off LA

China flexed its military muscle Monday evening in the skies west of Los Angeles when a Chinese Navy Jin class ballistic missile nuclear submarine, deployed secretly from its underground home base on the south coast of Hainan island, launched an intercontinental ballistic missile from international waters off the southern California coast. WMR’s intelligence sources in Asia, including Japan, say the belief by the military commands in Asia and the intelligence services is that the Chinese decided to demonstrate to the United States its capabilities on the eve of the G-20 Summit in Seoul and the Asia-Pacific Economic Cooperation summit in Tokyo, where President Obama is scheduled to attend during his ten-day trip to Asia.

The reported Chinese missile test off Los Angeles came as a double blow to Obama. The day after the missile firing, China’s leading credit rating agency, Dagong Global Credit Rating, downgraded sovereign debt rating of the United States to A-plus from AA. The missile demonstration coupled with the downgrading of the United States financial grade represents a military and financial show of force by Beijing to Washington.

The Pentagon spin machine, backed by the media reporters who regularly cover the Defense Department, as well as officials of the Federal Aviation Administration (FAA), North American Aerospace Defense Command (NORAD), and the U.S. Northern Command, is now spinning various conspiracy theories, including describing the missile plume videotaped by KCBS news helicopter cameraman Gil Leyvas at around 5:00 pm Pacific Standard Time, during the height of evening rush hour, as the condensation trail from a jet aircraft. Other Pentagon-inspired cover stories are that the missile was actually an amateur rocket or an optical illusion.

There are no records of a plane in the area having taken off from Los Angeles International Airport or from other airports in the region. The Navy and Air Force have said that they were not conducting any missile tests from submarines, ships, or Vandenberg Air Force Base. The Navy has also ruled out an accidental firing from one of its own submarines.

Missile experts, including those from Jane’s in London, say the plume was definitely from a missile, possibly launched from a submarine. WMR has learned that the missile was likely a JL-2 ICBM, which has a range of 7,000 miles, and was fired in a northwesterly direction over the Pacific and away from U.S. territory from a Jin class submarine. The Jin class can carry up to twelve such missiles.

Navy sources have revealed that the missile may have impacted on Chinese territory and that the National Security Agency (NSA) likely posseses intercepts of Chinese telemtry signals during the missile firing and subsequent testing operations.
You can read the whole story at the link above.

Whether Wayne Madsen is correct on this missile story or not, China seems spoiling for confrontation these days. After all, they have excess young males to spare.

Oh... waaaiiittt a minute.... Today's inaugural QE2 POMO was delayed for 30 minutes or so because of some computer glitch. Maybe that was a cyber-attack from China, because they are pissed at Bernanke for launching QE2. LOL.

Today's Flash Crash: Apple (AAPL)

Zero Hedge reported the other day that, despite the SEC blaming Waddell & Reed for the flash crash on May 6, flash crashes occur regularly. Regular, as in one or two a day. In 2010, there have been 549 flash crashes to date, according to Zero Hedge/Nanex.

Today's flash crash was Apple (stock symbol: AAPL). At 11:21 AM EST, the stock went from $312 to $212, and back to $312. One minute is an eternity for algo bots, whose idea of swing trade is any trade that last no more than 1 or 2 second.

Happy flash trading.

China Lashes Fed Easing as Risk to Global Recovery

Well.... Tough s__t.

Reuters reported on 11/11/2010:

Nov 11 (Reuters) - China said on Thursday that the U.S. Federal Reserve's move to ease monetary policy risked undermining the global economic recovery, adding that Washington "should not force others to take medicine for its own disease".

A senior Chinese central bank official told reporters at the G20 summit in Seoul that the Fed's move had caused "strong concern" around the globe, and major reserve countries ought to factor in the global impact of their policies.

Oh really? Has China acted as if it cares about anyone, or any country other than Chinese and China?

Oh, I see, the Chinese are exceptional. Literally.
A Foreign Ministry spokesman added that Chinese President Hu Jinatao, discussing Washington's wish to see a sharp revaluation of the yuan, had told U.S. President Barack Obama earlier that reform of the currency would have to be gradual.

Meaning they have no intention of doing it.

It was their choice, aping the Japanese, to pursue mercantilism, artificially devaluing their currency to have an export edge. They've been phenomenally successful, flooding the world with their junk, wiping out the locally produced goods. So, when the Federal Reserve goes mercantilistic, the Chinese cry foul. It's not fair! It's not good for the world! (as if they ever cared about the world.)

For that matter, the EU is a big exporter thanks to Germany, who is also crying foul. So is Brazil.

To these exporters, the US exists simply to gobble up what they offer, without resistance. Like those foie gras goose.

Things are about to get ugly. Now every nation is mercantilist. The currency war is on, and inflation is on.

Thursday, November 11, 2010

Matt Taibbi on Foreclosuregate: Ready, Set, Fraud!

Matt Taibbi, who made Goldman Sachs almost a household name by comparing it to a "vampire squid", writes about what MSMs continue to ignore: 'Foreclosuregate'.

In the article for Rolling Stone Magazine, Taibbi reports on a day in a foreclosure "rocket docket" in Florida (judicial state, where foreclosures have to go through the court) where the presiding judge is determined to resolve 25 foreclosure cases PER HOUR, and shows us what other researchers (like William Black and Karl Denninger) have also shown us: The whole thing has been a one, gigantic FRAUD by the banks, from creating mortgage loans to securitization to foreclosures. All of it.

Worse, the court system is set up to assist the banks over and over again until they present the judge with a decent enough set of fraudulent papers.
Then, good riddance, the judge decides in favor of the banks and they can take the house. Those judges in New York, who side with the homeowners, are rare exceptions.

And he also agrees with me, that we are conditioned to blame the "deadbeats", not the Wall Street banks.

From Rolling Stone Magazine:

The foreclosure lawyers down in Jacksonville had warned me, but I was skeptical. They told me the state of Florida had created a special super-high-speed housing court with a specific mandate to rubber-stamp the legally dicey foreclosures by corporate mortgage pushers like Deutsche Bank and JP Morgan Chase. This "rocket docket," as it is called in town, is presided over by retired judges who seem to have no clue about the insanely complex financial instruments they are ruling on — securitized mortgages and laby­rinthine derivative deals of a type that didn't even exist when most of them were active members of the bench. Their stated mission isn't to decide right and wrong, but to clear cases and blast human beings out of their homes with ultimate velocity. They certainly have no incentive to penetrate the profound criminal mysteries of the great American mortgage bubble of the 2000s, perhaps the most complex Ponzi scheme in human history — an epic mountain range of corporate fraud in which Wall Street megabanks conspired first to collect huge numbers of subprime mortgages, then to unload them on unsuspecting third parties like pensions, trade unions and insurance companies (and, ultimately, you and me, as taxpayers) in the guise of AAA-rated investments. Selling lead as gold, shit as Chanel No. 5, was the essence of the booming international fraud scheme that created most all of these now-failing home mortgages.

The rocket docket wasn't created to investigate any of that. It exists to launder the crime and bury the evidence by speeding thousands of fraudulent and predatory loans to the ends of their life cycles, so that the houses attached to them can be sold again with clean paperwork. The judges, in fact, openly admit that their primary mission is not justice but speed. One Jacksonville judge, the Honorable A.C. Soud, even told a local newspaper that his goal is to resolve 25 cases per hour. Given the way the system is rigged, that means His Honor could well be throwing one ass on the street every 2.4 minutes.

Foreclosure lawyers told me one other thing about the rocket docket. The hearings, they said, aren't exactly public. "The judges might give you a hard time about watching," one lawyer warned. "They're not exactly anxious for people to know about this stuff." Inwardly, I laughed at this — it sounded like typical activist paranoia. The notion that a judge would try to prevent any citizen, much less a member of the media, from watching an open civil hearing sounded ridiculous. Fucked-up as everyone knows the state of Florida is, it couldn't be that bad. It isn't Indonesia. Right?

Well, not quite. When I went to sit in on Judge Soud's courtroom in downtown Jacksonville, I was treated to an intimate, and at times breathtaking, education in the horror of the foreclosure crisis, which is rapidly emerging as the even scarier sequel to the financial meltdown of 2008: Invasion of the Home Snatchers II. In Las Vegas, one in 25 homes is now in foreclosure. In Fort Myers, Florida, one in 35. In September, lenders nationwide took over a rec­ord 102,134 properties; that same month, more than a third of all home sales were distressed properties. All told, some 820,000 Americans have already lost their homes this year, and another 1 million currently face foreclosure.

Throughout the mounting catastrophe, however, many Americans have been slow to comprehend the true nature of the mortgage disaster. They seemed to have grasped just two things about the crisis: One, a lot of people are getting their houses foreclosed on. Two, some of the banks doing the foreclosing seem to have misplaced their paperwork.

For most people, the former bit about homeowners not paying their damn bills is the important part, while the latter, about the sudden and strange inability of the world's biggest and wealthiest banks to keep proper records, is incidental. Just a little office sloppiness, and who cares? Those deadbeat homeowners still owe the money, right? "They had it coming to them," is how a bartender at the Jacksonville airport put it to me.

But in reality, it's the unpaid bills that are incidental and the lost paperwork that matters. It turns out that underneath that little iceberg tip of exposed evidence lies a fraud so gigantic that it literally cannot be contemplated by our leaders, for fear of admitting that our entire financial system is corrupted to its core — with our great banks and even our government coffers backed not by real wealth but by vast landfills of deceptively generated and essentially worthless mortgage-backed assets.

You've heard of Too Big to Fail — the foreclosure crisis is Too Big for Fraud. Think of the Bernie Madoff scam, only replicated tens of thousands of times over, infecting every corner of the financial universe. The underlying crime is so pervasive, we simply can't admit to it — and so we are working feverishly to rubber-stamp the problem away, in sordid little backrooms in cities like Jacksonville, behind doors that shouldn't be, but often are, closed.

About loan securitization:
Since these mortgage-backed securities paid much higher returns than other AAA investments like treasury notes or corporate bonds, the banks had no trouble attracting investors, foreign and domestic, from pension funds to insurance companies to trade unions. The demand was so great, in fact, that they often sold mortgages they didn't even have yet, prompting big warehouse lenders like Countrywide and New Century to rush out into the world to find more warm bodies to lend to.

In their extreme haste to get thousands and thousands of mortgages they could resell to the banks, the lenders committed an astonishing variety of fraud, from falsifying income statements to making grossly inflated appraisals to misrepresenting properties to home buyers. Most crucially, they gave tons and tons of credit to people who probably didn't deserve it, and why not? These fly-by-night mortgage companies weren't going to hold on to these loans, not even for 10 minutes. They were issuing this credit specifically to sell the loans off to the big banks right away, in furtherance of the larger scheme to dump fraudulent AAA-rated mortgage-backed securities on investors. If you had a pulse, they had a house to sell you.

As bad as Countrywide and all those lenders were, the banks that had sent them out to collect these crap loans were a hundred times worse. To sell the loans, the banks often dumped them into big tax-exempt buckets called REMICs, or Real Estate Mortgage Investment Conduits. Each one of these Enron-ish, offshore-like real estate trusts spelled out exactly what kinds of loans were supposed to be in the pool, when they were to be collected, and how they were to be managed. In order to both preserve their tax-exempt status and deserve their AAA ratings, each of the loans in the pool had to have certain characteristics. The loans couldn't already be in default or foreclosure at the time they were sold to investors. If they were advertised as nice, safe, fixed-rate mortgages, they couldn't turn out to be high-interest junk loans. And, on the most basic level, the loans had to actually exist. In other words, if the trust stipulated that all the loans had to be collected by August 2005, the bank couldn't still be sticking in mortgages months later.

Yet that's exactly what the banks did. In one case handled by Jacksonville Area Legal Aid, a homeowner refinanced her house in 2005 but almost immediately got into trouble, going into default in December of that year. Yet somehow, this woman's loan was placed into a trust called Home Equity Loan Trust Series AE 2005-HE5 in January 2006 — five months after the deadline for that particular trust. The loan was not only late, it was already in foreclosure — which means that, by definition, whoever the investors were in AE 2005-HE5 were getting shafted.

Why does stuff like this matter? Because when the banks put these pools together, they were telling their investors that they were putting their money into tidy collections of real, performing home loans. But frequently, the loans in the trust were complete shit. Or sometimes, the banks didn't even have all the loans they said they had. But the banks sold the securities based on these pools of mortgages as AAA-rated gold anyway.

In short, all of this was a scam — and that's why so many of these mortgages lack a true paper trail. Had these transfers been done legally, the actual mortgage note and detailed information about all of these transactions would have been passed from entity to entity each time the mortgage was sold. But in actual practice, the banks were often committing securities fraud (because many of the mortgages did not match the information in the prospectuses given to investors) and tax fraud (because the way the mortgages were collected and serviced often violated the strict procedures governing such investments). Having unloaded this diseased cargo onto their unsuspecting customers, the banks had no incentive to waste money keeping "proper" documentation of all these dubious transactions.

Please go to his Rolling Stone Magazine article, and read it. It is not the matter of 'deadbeat' homeowners who 'didn't deserve' it. It is the matter of Wall Street banks getting away again with probably the biggest fraud and ponzi, with the help of the government and the court system, again.

And for the unlucky homeowners in non-judicial states, there's no help. Not that I know of, short of declaring bankruptcy. Banks send them conflicting, fraudulent foreclosure papers, there is no public venue for the homeowners to contest them, and banks win by obtaining the houses that they LACK legit title to.

Obama Stimulus Panel Probes Stimulus Waste at Ritz-Carlton Hotel

Talk about "tone-deaf"...

Washington Examiner reports:

Members of a key panel created by the American Recovery and Reinvestment Act, better known as the stimulus bill, have scheduled a meeting on November 22 to consider ways to prevent "fraud, waste, and abuse of Recovery Act funds." The meeting will be held at the super-luxe Ritz Carlton Hotel in Phoenix, Arizona.

The group is the Recovery Independent Advisory Panel, a sub-committee of the larger Recovery Accountability and Transparency board (sometimes known as the RAT board). The stimulus bill set up the Recovery Independent Advisory Panel, or RIAP, to make recommendations to identify and prevent waste of the bill's $814 billion in stimulus spending.

...The Ritz-Carlton is located "in the midst of the picturesque Camelback Corridor, the city's premier shopping, dining and financial district," according the hotel's website. Hungry waste-and-abuse hunters can dine in the "casual elegance, relaxed atmosphere and uniquely inviting ambiance of the European-inspired bistro 24." Or they can enjoy Afternoon Tea in the "uniquely warm and inviting" Lobby Lounge. And at any time, waste-and-abuse watchdogs who also enjoy golf will be "just minutes from some of the best courses in the world," including the Tournament Players Club, the Arizona Biltmore, and several others.

It is another fine example of what one of my friends calls the "Pan-Am" syndrome, where everyone working for a dying entity (whether it is an airline like Pan-Am or the US federal government) grabs everything they can while they still can, right before the collapse - a bottle of champaigne and silverware from the aircraft, an extended holiday in Spain, golfing in Arizona while wining and dining at the Ritz. Hell with the worries of the economy, those are just for the small people unaffiliated with anything "federal government".

China's SAIC Motor to Be GM IPO Investor

After the US taxpayers were made to pay to "save" GM and "save US auto jobs" (which by the way Prez Obama admitted would be gone forever), US Government Motors is likely to sell equity to its Chinese-government-owned partner, SAIC Motor Corp, in the upcoming IPO.

Reuters reports:

Nov 10 (Reuters) - General Motors Co [GM.UL] is in the final stage of talks to sell equity to long-time Chinese partner SAIC Motor Corp (600104.SS) in conjunction with its landmark initial public offering, two people familiar with the matter said.

The two government-funded automakers are currently finalizing how much of a stake SAIC would buy in the top U.S. automaker after discussions involving technology sharing and SAIC's ambitions to move beyond the China market, the sources said.

On the side note, guess who's been suddenly popping up in the financial news media: ex-Car Czar and Wall Street hedge fund manager Steven Rattner. Mr. Rat is back, to shine the light upon his fine leadership in turning around GM on the eve of the IPO, no doubt.

Chutzpah. These people cannot help themselves.

Protest Against TSA's Grouping and Molestation Procedure

Finally the "small people" are fighting back.

TSA (which by the way stand for Transportation Security Administration) has started a very aggressive pat-down procedure at the nation's airports after an inkjet printer supposedly rigged as a bomb was found in a cargo plane. Remember that news? Did you notice how quickly it disappeared, with no follow-up?

For "Your safety is our priority" TSA under 'Big Sis' Janet Napolitano, a problem on a cargo flight is just another pretext to harass airline passengers further. In the warped mind of TSA and Ms. Napolitano, a cargo plane problem will go away by the aggressive pat-downs on passengers who refuse to go through the naked body scan; with the pat down so aggressive and uncomfortable, borderline sexual abuse, the passenger will opt for being irradiated with dangerous dose of x-ray and having his/her nude pic looked at by perverts at TSA.

MSMs like New York Times always manage to find some brainless airline passengers who almost always praise a new procedure at the airport. "It may be a bit inconvenient, but it's for our own safety!" is the basic line these idiotic passengers always say.

Not so, as Alex Jone's Prison Planet has been reporting:

The populist Drudge Report website has stirred a national debate on TSA abuse of passengers through dangerous naked body scanners and invasive groping measures, culminating in an onslaught of resistance from numerous prominent travel and pilots associations, and leading to the organization of a national opt out day on November 24.

While the corporate media characterizes opposition to airport oppression as a disgruntled minority, Drudge has led the charge in exemplifying that the backlash is in reality part of a rapidly accelerating national outrage that now includes no less than five major travel bodies as well as a flight attendants union.

In addition, individual cases of oppression at the hands of TSA thugs are now pouring in, with Drudge ensuring they receive the attention they deserve by making airport outrage a top story on his website for days on end.

...What was a stirring undercurrent is now out in the open, with anger bubbling to the surface and prompting a massive national debate.

The rebellion is surging, not only because of the noted health dangers of body scanners, but because the TSA has proven time and time again that its justification in treating the American people with less respect than farmyard animals is completely fraudulent

...The Atlantic’s Jeffrey Goldberg was told by a TSA agent directly that pat downs were made increasingly invasive not for any genuine security reason, but to make the experience so uncomfortable for the traveler that they would prefer to use the body scanner, despite the fact that scientists at Columbia University and the Inter-Agency Committee on Radiation Safety, along with other scientific bodies, have all warned that the devices increase the risk of developing cancer.

Remember the reason why naked body scanning was introduced and in the process made Michael Chertoff a richer man? Yes, that panty-bomber. Remember how on earth he got on the plane without a passport, to begin with? BECAUSE the CIA wanted him to board the plane. No MSM reported the fact, even though it was revealed in a Congressional hearing in January.

November 24 is a "national opt out day". Reclaim your dignity.

Wednesday, November 10, 2010

South Korea's Kospi Index Flash Crashed

2.7% in the last minute of trading. No, not the algo bots who have caused over 500 flash crashes this year in the US stock market.

According to Bloomberg, it's because "President Barack Obama and his South Korean counterpart Lee Myung Bak failed to reach agreement on a free-trade accord."

The Kospi Index chart from Bloomberg:

(h/t solochristos)

Obama's Debt Commission Proposes $4 Trillion Cuts

A presidential commission filled with politicians, multi-millionaires and a labor union president (SEIU) proposes $4 trillion deficit reduction over 10 years, on the eve of G20 Summit in Seoul, Korea, where just about everyone is pissed about Ben Bernanke's QE2. So, as if to appease them, the commission, on prodding from what's left of the White House economic team (actually only Tim Geithner remains) I'm sure, proudly pre-announced its plan.

And it's not what you think.

The commission proposes $4 trillion (well, actually $3.8 trillion) deficit reduction over 10 years as follows:

Discretionary spending: $1,464 billion
Mandatory spending: $733 billion
Tax reform: $751 billion
Other revenue: $210 billion
Net interest savings: $673 billion

Let's take a look at the discretionary spending reduction. The commission does suggest spending cuts in both defense and other discretionary (i.e. other government departments), $100 billion each. However, these cuts are to be phased in slowly, and it reaches $200 billion in 2015 as the total budget practically remain flat to slightly negative. After that, the budget for discretionary spending actually grows, and the so-called savings is calculated by subtracting the commission's budget from President Obama's budget request.

It is not the budget cut in a true sense. It's a spending cap. $3.8 trillion deficit reduction is not really a reduction, but simply spending less than what has been projected already, and call it a "reduction".

The "real" cuts seem to come from, hold your breath, "the small people" in increased taxes (the commission says it would be in combination with tax reform that would save money) and decreased benefits in health care and social security. Retirement age would be raised to 68. (Hear that, France?)

It's the modus operandi of the parasi... uh....ruling class: Take it from the least organized, least aware, easiest target who doesn't even know it is targeted, and may even welcome being targeted.

As the commission members are tasked with the important task of coming up with a debt reduction plan, you would think they volunteer their time for the good of the country paying for their own limos and gourmet lunches. Well, it has $500,000 budget, which by now may be totally depleted. (They were running out of money in early June.) Members receive transportation allowance and per diem.

Who's paying them? Us.

BTW, just so you remember, the federal government DOES NOT HAVE A BUDGET for this fiscal year. All it has is Nancy Pelosi's "fake budget". No one in the government seem to have any problem spending, starting at the top who's somewhere in Asia now.

And in case you missed, the first month of the fiscal year had a deficit of $140 billion. Less than October 2009, thanks to increased tax receipts from individuals, while corporate tax receipts were negative.

POMO under the QE2: $105 Billion, 11/12-12/9/2010

18 operations in 20 trading days.

From NY Fed announcement just released (emphasis is original):

Across all operations in the schedule listed below, the Desk plans to purchase approximately $105 billion. This represents $75 billion in purchases of the announced $600 billion purchase program and $30 billion of principal payments from agency debt and agency MBS expected to be received between mid-November and mid-December.

Quickly scanning the details, I see that they may purchase up to $10 billion in 30-year bonds.

30-Year Treasury Bond Auction Today

was what the stock market had been waiting anxiously today. The results are in, and they are rather ugly.

Amount auctioned: $16 billion, original issue.
Primary Dealer: $8.11 billion (50.7%)
Direct Bidder: $1.72 billion (10.8%)
Indirect Bidder: $6.13 billion (38.35%)
Bid to Cover Ratio: 2.31 (last month: 2.49; last original issue in August: 2.77)
Interest Rate: 4.250% (last original issue in August: 3.875%)
High Yield: 4.320% (allotted at high: 82.04%) (last month high yield: 3.852%)

The market reaction? Non-event. The 30-year bond yield spiked RIGHT BEFORE the release of the result (I was waiting at the Treasury's website), but it soon backed down to what it had been trading, as you can see in the chart of TYX (30-year bond rate) below:

Someone made a good money in a matter of 15 minutes or so...

Foreclosuregate: NY Judges Side with Homeowners

Washington Post reports that the judges in three counties in New York - Suffolk, Nassau and Kings counties - are increasingly siding with the homeowners who are being foreclosed, often by the nation's biggest banks, over the fraudulent documents and procedures and fraudulent/incomplete mortgage assignments and transfers.

Their judgement: because of these frauds, the foreclosing banks do not have standing to foreclose.

The Washington Post article tries to paint it as "paperwork" (i.e. trivial; just look at the wimpy title) problem, but what these judges are doing goes to the heart of the matter - what William Black calls "control fraud".

Some judges chastise banks over foreclosure paperwork
(Ariana Eunjung Cha, 11/09/2010 Washington Post) [Emphasis is mine.]

EAST PATCHOGUE, N.Y. - A year ago, Long Island Judge Jeffrey Spinner concluded that a mortgage company's paperwork in a foreclosure case was so flawed and its behavior in negotiations with the borrower so "repugnant" that he erased the family's $292,500 debt and gave the house back for free.

The judgment in favor of the homeowner, Diane Yano-Horoski, which is being appealed, has alarmed the nation's biggest lenders, who say it could establish a dramatic new legal precedent and roil the nation's foreclosure system.

It is not the only case that has big banks worried. Spinner and some of colleagues in the New York City area estimate they are dismissing 20 to 50 percent of foreclosure cases on the basis of sloppy or fraudulent paperwork filed by lenders.

...The situation in Suffolk and Nassau counties on Long Island and Kings County in Brooklyn- which have among the highest rates of foreclosure in the state and where the 81 judges handling foreclosures have become infamous over the past few years for scrutinizing paperwork for errors - provides a window into how the crisis could unfold across in the country.

While the level of tolerance for document mistakes varies from judge to judge, the group as a whole has a reputation for ruling against mortgage companies when paperwork issues or other problems arise. At least one bank, J.P. Morgan Chase, requires document processors to separate foreclosures cases from these three counties from those in the rest of the country. A high-ranking executive of the company is specially assigned to sign off on the area's foreclosure filings.

Judge Dana Winslow of Nassau County says he's thought a lot about why judges in his area are more apt to question filings. He said it comes down to one thing: Lack of trust for Wall Street. In this region, judges have seen a lot of inaccurate filings from the financial sector.

The article then lists several recent cases in which "paperwork errors" stopped the foreclosure:
On June 17, for example, Judge Karen Murphy of Nassau County ruled that Wachovia Bank lacked standing to foreclose on a home because the document used to prove ownership of the mortgage was incomplete.

On Sept. 21, Judge Peter Mayer of Suffolk County delayed a foreclosure by Ally Financial's GMAC mortgage unit after noticing that the paperwork transferring the mortgage to the bank was dated two days after the foreclosure was initiated.

And on Oct. 21, Judge Arthur Schack of Kings County dismissed a OneWest foreclosure motion because the bank had not adequately documented how the mortgage had been sold and resold to investors. He also questioned why the employee who signed many of the documents claimed to be a vice president of several different mortgage companies at the same time.

In a different case in May, Schack ruled that HSBC Bank could not foreclose on a home because the paperwork that assigned the mortgage to HSBC from the original lender, Cambridge, was "defective."

(You can read the entire article at the link above.)
A big can of worms is the securitization fraud.

If the mortgages weren't properly transferred to a securitization trust (REMIC - Real Estate Mortgage Investment Conduit) when the trust was duly set up, as seems to be the case in many (if not all) mortgages, then the certificates issued to the investors by the REMIC did not have any backing as specified in the pooling and servicing agreement. The investors were literally sold worthless papers (or digits on their accounts). The trustee of the REMIC is responsible for making sure the mortgages are properly transferred into the trust, and that these mortgages meet the standard specified in the agreement. It looks the trustees of numerous REMICs - large banks like Bank of New York Mellon, Deutsche Bank, Wells Fargo - didn't bother to do it.

Why is this important for the borrowers? Well, if the REMIC didn't own the underlying mortgages but was receiving the payment from the borrowers and distributing to the investors, I don't know a better word for that than FRAUD. Or RACKET. The borrowers were paying to the entity that had no right to receive payments.

New York is a judicial foreclosure state. Lucky for the struggling homeowners being foreclosed. The same fraudulent papers, filings, assignments, etc. are rampant also in non-judicial foreclosure states (California is one of them), but the homeowners who are being foreclosed in the non-judicial states have to bring a costly lawsuit to get a court hearing, and the burden of proof that the foreclosing party does not have the standing is on the homeowners, unlike in the judicial foreclosure states like New York.

It seems to me that non-judicial foreclosures are unconstitutional, denying the borrowers in the non-judicial states the right to be heard by the court while that right is enjoyed by the borrowers in the judicial states.

Thus, MSMs like Washington Post and the politicians in the pockets of Wall Street bankers (from President on down) don't want to touch "Foreclosuregate" very much, and when they do, they try their best to portray as a mere "paperwork" problem to be remedied very quickly and easily by the banks.

And we are conditioned to blame "greedy" borrowers and "deadbeats".

(h/t vecteur63)

Tuesday, November 9, 2010

Latest Ulsterman Report: White House Insider "Temporary Insanity"

or so the "White House Insider" hopes.

From Ulsterman's latest installment on November 8, 2010:

First, about the November election...

... How about some feedback on the midterms? Last time we talked you said the Democrats were going to lose up to 60 seats. It was more than that. A pretty tough night for Democrats? Do you think? Christ, it was about as bad a night as it could possibly be. Yes, I said we would lose up to 60 seats. I think at last count it was…65? That is almost too much to comprehend. I knew things were going to be bad for us, but…this was…deplorable. The party is in such a mess right now. My god…it’s just so bad. So incredibly bad.

Deplorable? Deplorable that the Democrats lost or that the Republicans won? Both! It didn’t have to be like this – that is what is so sickening about it all. Roll it back to early 2009. We had such an opportunity. With just a little bit more legislative moderation, a more unified tone, some damn common sense – we…the Democratic Party just pissed it all away. Flushed it gone. The president strutted around like some political peacock, the Congressional leadership basically told the opposition to go to hell – numerous times. Attack after attack on the business community…did they really think the American people were going to allow them to get away with mistake after mistake after mistake? Yeah, it’s deplorable the Republicans won so decisively, and it’s deplorable the Democrats made it so easy for them to do so.

Ok…so do you think the president is going to pull a Clinton and veer back to the middle of the political road? (shakes head) I have said it many times – Barack Obama is no Bill Clinton. He doesn’t have Clinton’s intellect, Clinton’s political know-how, or Clinton’s common sense. Barack Obama is too self involved, too bored of details, too lazy. But even more important, Barack Obama doesn’t have the people around him who will allow a turn toward the political middle. Many of the moderates in the Democratic Party were taken out with this election. What is left are the far left people – the -expletive- “Progressives” if you will. They are still in denial. Never before has such a group of like minded dumb -expletives- inhabited the halls of the United States government.

On Nancy Pelosi...

So will Nancy Pelosi be the minority leader in the House? Is she staying on as a member of Congress, because that would seem to contradict what you were telling me earlier…No. No I don’t think she is going to be Minority Leader. She doesn’t have the backing. That’s the word I have received from many different sources, including members of Congress. What Nancy Pelosi is doing now is trying to save face. It is desperate…and well, kind of pathetic too. I will say this with absolute certainty – if she does not get the minority leader position, she is leaving Congress. She has said that directly to members of her caucus.

On the "big scandal" about to hit...

So the Republicans are aware of the situation? Oh yeah. At least certain members are, and likely some who have very specific details. It is no casual thing to have incoming members of a new Republican House majority telling the media that the White House needs to make certain it doesn’t start shredding documents…well, that’s about as bold a declaration as one makes in this town. Those Republicans are making it clear to the Obama White House that they know something – and are willing to go after them over it. I just don’t think President Obama fully understands or appreciates what is going to be coming at him in 2011. The scrutiny and the power that a Republican Congress now holds over him is going to be immense. I’m not exaggerating when I say it might very well break this president.

Does anyone really think this president has the strength to endure this kind of political environment?

For the rest of the White House Insider articles by Ulsterman, I put the links on my post.

What Caused Precious Metal Sell-Off? CME to Blame?

It was not just gold, but other precious metals, too. Particularly silver, which hit $29 intraday and ended the day below $27.

Now, we may have a culprit whose mischief on behalf, no doubt, of the major bullion banks known to be very, very short silver caused the damage today not just on silver but across the board precious metals, dragging the stock market down along the way.

All it took was for the Chicago Mercantile Exchange, who operates COMEX, to change the margin requirements for silver.

SLV, an ETF that tracks silver, tumbled on almost 6 times the average volume.

From Zero Hedge:

PM Selloff Reason: CME To Raise Margin Requirements For Silver From $5,000 To $6,500

And if that doesn't work, there is always confiscation.

"CME confirmed silver margins raised from $5000 to $6500 (30%) effective 11/10 settl - no other metals effected"

Presumably, this affects the maintenance margin. And is a lovely way to kill paper longs.... but not shorts, of course.

This is also the last remaining self-regulating way for the market to tell the genocidal lunatic in the Eccles building to go fornicate himself, and his excess liquidity.

In case you don't know, "the Eccles building" is located at 20th Street and Constitution Avenue, N.W., in Washington, D.C., and it houses the Federal Reserve.

I don't think it was the "self-regulating way for the market", but "self-regulating way on behalf of J.P.Morgan Chase and HSBC".

It's getting to be a wild, wild world out there in the financial markets...

Zero Hedge has the actual announcement from CME.

Spectacular Intraday Sell-Off on Gold

Gold hit the all-time high at $1,425 earlier today, and all a sudden reversed downward right after 1:00PM EST, taking the general market with it.

What are you going to do now, Ben? Your QE2 is supposed to prop up the stock market so that we can feel wealthy.

Below are the charts of GLD (top) and S&P500 (bottom) intraday.

Fred Reed: Let's Attack Iran!

Fred Reed, whose articles are regularly featured at, writes about the latest squawking by the neocon Senator Lindsey Graham to attack Iran, and in the process deliciously comparing Senator Graham to a tapeworm.

His central message? War promoters, be careful what you wish for.

Let's Attach Iran: Children with Matches
(Fred Reed, 11/8/2010 Fred on Everything)

Oh good. I see that Senator Lindsey Graham wants to attack Iran. The US, he says, should "sink their navy, destroy their air force and deliver a decisive blow to the Revolutionary Guard."

Senator Graham has the brains of a tapeworm, making him eminently qualified for the senate. Tapeworms, I note, do not have brains. It is characteristic of warlike innocents, to include the Pentagon, to believe that if you destroy navies and air forces, you win wars. This worked well in Vietnam, you will recall, and as soon as we destroy the Taliban’s navy, Afghanistan will be a cakewalk.

Now, I understand that practicality and realism are alien concepts in American politics, to be approached with trepidation, but maybe, just once, we should think before sticking our private parts into a wood-chipper. Just once. I do not propose consistent rationality, forethought, or intelligent behavior. I profoundly respect my country’s traditions.

However, folk wisdom from West Virginia: Before you say, “I can whip any man in the bar!” it is well to scout the bar.

Note that the United States cannot defeat Iran militarily, short of using nuclear weapons. It is easy to start a war. Finishing one is harder. I could punch out Mike Tyson. Things thereafter might not go as well as hoped.

Some will find the thought of American martial incapacity outrageous. Can’t beat Iran? Buncha towel monkeys? Among grrr-bowwow-woof patriots, there exists a heady delusion of American potency, that the US has “the greatest military power the world has ever seen.” Ah. And when did it last win a war? In Afghanistan, for ten years the gloriousest military ever known, the expensivist, and whoosh-bangiest, hasn’t managed to defeat a bunch of pissed-off illiterates with AKs and RPGs.

At this point Lindsey of Persia will doubtless allude to the wonders of air power, of “precision-guided weapons,” of smart bombs that presumably read Kant on the way down. Those pitiable Iranians would have no hope of stopping our mighty bombers. True.

Implicit in this Thomistic fantasy (Clancy, I mean, not Aquinas) is that Iran wouldn’t, couldn’t, wouldn’t dare fight back without a navy, etc. Lindsey had better be very sure that Iran couldn’t block the Strait of Hormuz in retaliation. Enough of the world’s petroleum comes from the Gulf that the price would rise drastically if the Straits were blocked. Some economies would simply stop.

How many supertankers going up in flames would be tolerated before operators of tankers refused to risk it?

Iran recently began serial production of the Nasr 1, an anti-ship cruise missile. Tankers are thin-skinned and highly flammable. The Nasr 1 can be fired from the back of a truck. Trucks by their nature are mobile. They are easy to hide.

The Air Force, to include Naval Air, may be confident that it can destroy all of Iran’s missiles. The Air Force always believes that air power can do anything and everything—make coffee, win at marbles, everything. After all, don’t its airplanes say “Vrooom!” and “Swoosh!”? Don’t cockpits have lots of portentous buttons and spiffy little screens? Unfortunately the Air Force is regularly wrong.

In fact the entire military is regularly wrong about the ease and duration of its adventures. For example, it had no idea that Viet Nam would turn into an endless war ending in defeat (if that makes sense). Iraq notoriously was going to be a walk in the park. That the war on Afghanistan would last ten years with a distinct possibility of defeat…this never occurred to the soldiers.

It is barely conceivable that the Five-Sided Wind Box could do what Field Marshal Graham thinks it could do. The unexpected is always a possibility. But, the stakes being what they would be in Hormuz, hoo-boy….

Another possibility is that Israel will attack Iran, as it has threatened. I would like to think that even Bibi Nut-and-Yahoo has better sense but, it the US can produce gibbering wingnuts, why not Israel? The practical effects of an Israeli attack would be indistinguishable from those of an American attack: America would have to solve the problem. Which it probably couldn’t. Israel can bomb Iran’s nuclear codpieces, but it can’t defeat Iran. And if the Strait were blocked after an Israeli attack, the entire globe would holler, “Israel did it!” which would be true.

The distance from “Israel did it” to “The Jews did it,” though logically great, is emotionally short. People think in collective terms. Remember that after some Saudis dropped the Towers, the alleged war on terror morphed almost instantly into intense hostility for Moslems. It doesn’t make sense, but what has that got to do with anything?

I know a lot of Jews, who are all over the place politically and intellectually. They have in common a complete lack of resemblance to the scheming, hand-rubbing, heh-heh-heh Jews of Neo-nazi imagination. Few sacrifice Christian children (a temptation strongest, I can attest, among Christian parents). But…people think collectively.

Congress doesn’t support Israel because it likes Israel, but from political expediency. If the wind blows the other way, so will Congress. Gasoline at twelve dollars is a lot of wind in a commuting country.

Things worsen for America, yet we really don’t know where the country is going or how it will react. The last domestic catastrophe was the Great Depression, when America was a very different place. How bad can things get, economically, politically, internationally? How does a pampered population incapable of planting a garden respond to genuinely hard times? “It can’t happen here,” one hears. What can’t? I suspect that all sorts of things could happen, given sufficiently hard times.

The United States is today an edgy, unhappy country, sliding toward poverty, increasingly dictatorial, inchoately angry, hostile to blacks, the French, Mexicans, Moslems and, creepingly, the Chinese. (Jews, perhaps to their surprise, don’t make the enemies list.) Americans don’t do cosmopolitian. The federal pressure for diversity exists because otherwise no one would associate with anyone else. The Persian Gulf is one of few places that plausibly might wreck the industrial world. There would have to be someone to blame. And Israel can’t survive without American suppport.

Maybe I’m crazy. But if I were an Israeli, I’d find a nice café on Diesengoff and enjoy a double cappucino, watch the girls, and keep my bombs in my pocket. Let somebody else take the fall.

Monday, November 8, 2010

What the Fed Officials Are Telling Us About QE2

It is telling us about the abject failure of the government (Congress and the White House) to improve the US economy.

Suppose, just suppose that Ben Bernanke is doing QE2 out of goodness of his heart, that he is doing all he can in the only way he knows how, to support the economy from collapsing.

(Don't laugh.)

He is a central banker, an academic before that, and a Keynesian like all central bankers in the world. He doesn't know how the real world works, he doesn't know why Silicon Valley thrives by selling better products cheaper (deflation). As the Fed chief, he is in charge of monetary policies, as opposed to fiscal, which is the domain of the government. He has only one tool left to possibly stimulate the economy, and that is quantitative easing, as it is supposed to achieve the equivalent of the fed funds rate going into negative numbers. To him, seeing a healthy inflation is seeing a healthy economy.

So he has decided to do QE2, to do his best to see a healthy inflation/economy. What does that tell you about the fiscal policies of the government, when a banker feels such an urgent need for a drastic action over the state of economy, which should be the worry of the government?

It tells me that there has been an absolute lack of effective fiscal policies coming from the administration and Congress for two years. Bernanke felt he had to do something, as nothing was coming out of the admin and Congress. Nothing.

Sure, the health care "reform" bill passed. But it will only create further burdens on citizens and businesses. Ditto for the financial "reform" bill. As for the stimulus bill, what stimulus? It stimulated the Chinese economy, and it stimulated the public union employees.

Rumors say that Obama is very disinterested in actually doing the work as President of the United States. He's habitually late in coming to policy meetings, leaves in 10 minutes. He'd rather watch ESPN and play golf. All he cares about is speaking in front of the adoring crowd (as he's doing in India), reading the script off his teleprompters without which he is reportedly a rather dull, slow speaker. He can't be bothered to do the routine, daily work as the head of the state.

And clearly no one has bothered him.

With the new, Republican Congress and still defiant Democratic leaders comes a gridlock, with all the burdensome laws and regulations that somehow passed during the first two years of Obama presidency intact. The only person who could do something and do it quickly is Ben Bernanke.

I am not saying Ben should be doing QE2. He shouldn't, but I think I can understand why he is doing it. It is to make up for non-action by the Obama government to restore the confidence and trust, and thus improve the economy.

As a central banker, he doesn't have a judicial power to bring fraud perpetrators (like his Fed member banks) to justice and thus restore confidence. He doesn't have a fiscal power to improve the economy. His only monetary tool left seems to be the quantitative easing, but he can act now, instead of weeks and months of inaction by Congress and the White House.

Ben Bernanke's Fed is doing (or thinks it is doing) monetarily what the Obama government should be doing fiscally.

Thus the Op-Ed by Kevin Warsh on Wall Street Journal today. What struck me most is NOT his doubt about QE2 (he voted for it after all) but his push for more coherent and pro-growth fiscal, regulatory and trade policies by the government, which he currently sees missing. What the monetary policies alone can do is limited, according to him.

In the same vein is the speech by the Dallas Fed president Richard Fisher (link from Zero Hedge). Fisher says toward the end of the speech:

The Fed is doing its level best to deliver on the dual mandate it was given by the Congress. But monetary accommodation, by itself, is not the answer to our current woes. The Fed, as I see it, has taken a leap of faith that our political leaders will forge a sensible budgetary and regulatory path that incentivizes businesses to put to work the money the Fed is printing to invest in creating jobs for American workers...

We need for the Congress to move quickly, beginning in its lame-duck session. As Winston Churchill said, “We need action this day!”

Otherwise, the effect of quantitative easing will, in my view, simply result in financial speculation, further investment in more welcoming quarters abroad and, ultimately, in “super ordinary” inflation. The FOMC is taking a calculated risk. If the Congress and the Executive fail to deliver, I believe the FOMC will have to consider changing course.

Here is the message: The Fed is going out of its way to be a good citizen. It is time for the Congress to do the same.

For whatever reason, the Fed officials see a grave, imminent danger to the US economy due partly to the inaction, wrong policies, or both, by the government in the past two years. And they say they've acted unilaterally, hoping that the government gets in shape very quickly, even during the lame-duck session.

But then we see Ms. Pelosi partying to celebrate her accomplishments, we see the President of the US in campaign style again in India, doing the town hall meeting and dancing with the locals and shipping more jobs out of the US.

Fisher's fear that the Fed's gamble may end up in financial speculation, money flowing out of the US, and out of the ordinary inflation seems well justified.

Oh well. Can we at least have Dow 16,000 then please? And gold at $2,000? By the year end, if you can.

Somehow, I am not as angry at Benny and the Inkjets as before. At least they can say they did all they could (whether they should have done or not is another question), unlike the partying leadership of the government.

Obama Doing a Town Hall Meeting... in India?

Being surrounded by the adoring crowd is what he wants and where he wants to be. Never mind that he's not running for an office in India.

Indians can have him, as far as I'm concerned, as their Prez, if they think they can afford him and his family. Take his entourage of 6000 personnel also, and 150 journalists. 250 CEOs can stay there, as their companies are still busy shedding jobs in the US and hiring Indians anyway.

If you want to read about this town hall meeting halfway across the globe by the US prez who never ceases to portray the weakness of the US anywhere he goes, go to The Times of India article.

True Money Shines - Gold $1,400, Silver $27

And that's whatever the fiat currency US dollar does, which is up today. Crude oil is behaving like a commodity (down), but agricultural ETFs that I track are also defying the dollar. Cotton (BAL), coffee (JO) are up, sugar (SGG) just turned green.

Food and gold/silver. We're going back to the medieval era before the central bankers appeared and started fractional reserve banking ...

From page:

Sunday, November 7, 2010

Kevin Warsh's Op Ed on WSJ - The Fed's Good Cop Bad Cop Routine Again

The Fed chairman Ben Bernanke put up a modest Op-Ed piece in Washington Post on Thursday last week, trying to justify pumping $600 billion extra money into the financial system against cacophony of protests from nations including China, Brazil, and Germany.

As if to appease them, Kevin Warsh, a former Morgan Stanley banker and former PPT member and a current member of the Board of Governors of the Federal Reserve whose writings have been featured in this blog before, wrote an Op-Ed piece for Wall Street Journal to be published tomorrow but available online already. He's talking like a free-market-loving fiscal conservative. You can read it here.

Now, whether because of this article or not, the stock futures dipped a little. Dow futures is currently down 15 points. So the game plan may be a down day on Monday for the stock market, to correct overbought condition and sucker in shorts who have been itching to short the market for its bogus ramp-up since September; then bam! Turnaround Tuesday and the market jumps 200 points again.

Oh wait, that's what they want me to think... OK, the opposite of that would be a sizable upday but on low volume, and a sell-off comes on Turnaround Tuesday.

Kevin Warsh, by the way, is speaking tomorrow at 3:30 PM EST at SIFMA conference in New York. It's an annual meeting of Securities Industry and Financial Markets Association, and other speakers include Sen. Chris Dodd, FDIC Chairman Sheila Bair, and SEC Chairman Mary Schapiro. Hmmm... An upday Monday all the way to 3:30 PM, and hard sell-off to unchanged or slightly below in the last 30 minutes.

Anyone's guess is good as anyone else's guess, since the market has been broken... Good night and good luck if you trade the market.

News That Disappeared Very Quickly from MSM

What was that all about?

- Heightened terror alert for Europe, particularly France and Germany, that a major terror attack was imminent.

- Printer ink cartridge bomb scare.

- "Foreclosure fraud" and "mortgage securitization fraud"

Regarding the last one, after a short burst of news (such as NY Fed and PIMCO suing Bank of America) both have gone awfully quiet. Some state attorney generals who were pushing for wider investigation of these dual frauds (particularly the first one) were booted out in the November 2 election. California's AG Jerry Brown had stopped saying anything about foreclosure fraud once his prospect of beating Meg Whitman in the gubernatorial race was secure, way before the election.

Yves Smith, of Naked Capitalism, did write an Op-Ed in the MSM of MSMs, New York Times, on October 30, 2010, a rather muted writing fit for the readers of NYTimes. But the topic has quickly disappeared from the front page of major news outlets, while foreclosures with fraudulent documentation and by parties who may have no standing to foreclose continue throughout the nation.

Instead, the news is all about politics - GOP trying to repeal this law or that, and the Obamas dancing with Indians on their extravagant tour of Asia. In other words, we are made to watch the puppet show, yet again.

Oh I almost forgot about the news that also disappeared in the lightening speed:

- The Federal Reserve embarking on the quantitative easing part 2, with $600 billion over 8 months.

Nothing to see here, except for the puppet show. Don't you dare try to find out who the puppet master is.