The revisions to GDP published this morning have turned to disgustingly nasty one of my favorite charts.  Specifically, this one:

You’ve all seen this a dozen times.  Well, here’s what it looks like with the revised GDP numbers “corrected” in the Excel file:

“Holy Sheeit” doesn’t even begin to describe this.

These are not small changes, but they also mark the desperation of our government to avoid recognition of even a tiny, 2% annualized decrease in GDP!

That’s right folks – “as-reported”, the maximum y/o/y “depression” that garnered the title “Great Recession” was a minuscule 2% decrease in REPORTED nominal GDP.

But look at the policy response.  Oh, and that last dot – it’s estimated, based on the 2Q preliminary GDP numbers (which are almost-certainly too “hot” and the debt numbers (almost-certainly too “cold”.)

In addition the revisions make clear that there was in fact a zero real growth rate in 2006!  There was your warning…. and likely why we had the nice little dump in the market starting in the early part of 2007.

(Revisions only go back to the e/o/y 2006 numbers.)

If you look to the 2003-2007 period for a clue as to how our government will respond, you’re in for a stunner – there will be no material decrease in deficits while economic “recovery” on a nominal scale will be unlikely to go beyond 4% on a reported basis.

At this rate we’re gonna be Greece – and sooner than you think.

Ponzi Ponzi Ponzi!

The Market-Ticker

This is extremely important, especially for those people who are facing foreclosure.  A large majority of foreclosures are initiated by MERS.  There are at least 3 state appellate court rulings now that have established that MERS is not an interested party to a foreclosure, and it has been subsequently barred from intiating foreclosures in those states.  Now it appears that this Complaint is accusing MERS of being nothing more than a conspiracy amongst the large banks, which has resulted in nothing more than a way to fraudulently convey title.  I will not be at all surprised if this ends up being the case. 

As an aside, I am truly disgusted with Mike Cox, the current Attorney General of the State of Michigan, who despite having not only appellate precedent but a myriad of other evidence to show that MERS is responsible for many foreclosures in this state, and yet he has done absolutely nothing to protect the residents of the State of Michigan.  Instead, he’s running for governor.  Caveat emptor.

 

I was wondering how long it would take before someone got their dander up….

“Defendant Merscorp, Inc., is a foreign corporation created in (on?) or about 1998 by conspirators from the largest banks in The United States in order to undermine and eventually eviscerate long-standing principles of real property law….

MERS is the RICO enterprise and is the primary innovation through which the conspirators, including the Defendants, have accomplished their illegal objectives as detailed throughout this complaint.

Well, well, well…. read the rest of the complaint – it’s good.  Specifically, it appears they managed to get the “signer” of a large number of these documents (who claims to be an officer of MERS) to admit that she is in fact not a corporate officer, and in fact doesn’t even know who the corporate secretary of the company is!

On it’s face, the complaint looks pretty ugly.

I’ll be watching to see how the case develops; if you remember my previous articles about MERS, I put forward the belief that what they had attempted to do was end-run around the statutory requirements of several states with regard to assignment and recordings for real property, not to mention potentially the laws relating to trusts and assignments “in blank” (effectively, the creation of bearer paper, which has a whole host of related issues.)

The Market Ticker

From an article in the HuffingtonPost today:

After Senate Democrats broke a 50-day filibuster and restored unemployment benefits to the long-term jobless, Sen. Chuck Schumer (D-N.Y.) vowed to do more.

“There are a number of people who have maxed out, they’ve been looking and looking for work and haven’t found it, and there is a separate act that would extend the unemployment benefits to them,” Schumer told New York’s WENY-TV. “Extending this was really important. There are some people who go beyond the 99 weeks and we’re going to try to do that next.”

Last year, Congress enacted several pieces of legislation that ultimately gave the unemployed in some states 99 weeks of benefits. With nearly 15 million unemployed competing for just three million jobs available, 99 weeks isn’t enough time for some people to find work. Hundreds of thousands had already joined the ranks of the “99ers” in April. The Washington Post reported recently that the total had reached 1.4 million.

While it is admittedly extremely hard to get a job these days, exactly when is the point at which this ceases being unemployment and merely becomes ‘permanent welfare’ – the 49% of the people in this country working to support the other 51%?  It’s already more lucrative to stay on unemployment rather than take a minimum wage job.  How long before the 49% say, ‘I’m done with supporting all these other people’ and they decide to just stop working?

Unemployment was designed to temporarily be a bridge between jobs.  It has now become a crutch.  Since the government has shown absolutely no intention of discontinuing continual financial support of failed and insolvent institutions and a complete lack of desire to prosecute the fraud and corruption, there certainly isn’t going to be any creation of new jobs.  So, I guess the answer is to pay people not to work, since the government is hell-bent on destroying any inkling of entrepreneurship that might remain in this country – and with it, the promise of any new job creation.

Woe to you that continue to slave at your job to support others….apparently, indefinitely.  Just remember who’s at fault here:

• The government incentivized outsourcing, which not only resulted in a loss of jobs but also resulted in the lowering of wages because of global wage arbitrage
• The government allowed financial institutions to gamble with your money by caving to bank lobbyists who convinced  Congress to remov all leverage limits
• The government looked the other way while these banks designed fraudulent financial instruments and sold them to every unsuspecting entity they could find, including private and public pension funds and retirement accounts – these iinstruments drove the housing bubble that made consumers think their house was worth far more than it ever was in real terms, and also put home prices out of the reach of the average wage -earner (refer to 1st bullet-point); so, wages were going down while home prices went up
• When everything blew up in the financial institution’s faces, instead of prosecuting the fraud and corruption, they took American’s tax dollars and made YOU liable for their fraud
• To add insult to injury, government then passed ‘healthcare’ reform, and buried inside the more than 2,000 page document, was a mandate that this reform be administered by the IRS, and what was purported to bring the cost of healthcare down, will increase the cost of healthcare and decrease options and quality – but in the meantime, it’s just a great big new tax across the board (and yes, this means you too – you low-income earners)
• Then government passed another bill in excess of 2,000 pages in the name of ‘financial reform’ – yet this bill punishes no one for wrong doing, but instead places even more authority into the hands of the same regulators that willfully looked the other way when the banking institutions were peddling their fraudulent investment vehicles
• Soon, government will contemplate Cap & Trade, which was designed so that the same banks that sold fraudulent financial products can soon sell the ‘rights’ to pollute by trading carbon credits, which carbon credits are deemed ‘imperative to save the planet from global warming,’ which is based on a scientific model that has been proven to be….fraudulent….without so much as a formal investigation by Congress.  The result of Cap & Trade will be more restrictions, restraints and taxes on all businesses (well except for the chosen few who will have lobbyists lining the pockets of Congress).  The result of all this will be exactly the same as what happened to housing prices: ‘energy prices will necessarily skyrocket’ — Barack Obama
• So, having destroyed the real economy, and with plans in place to decimate what is left of it, Congress must now must redistribute the wealth of those, who by some miracle still have a job, to those who do not, in order to avoid the mass riots that surely would have occurred by now if not for the promise of indefinite government hand-outs

Welcome to the new America.  FedUp yet?

As the mother of a son who is serving his country honorably on the front lines in Afghanistan, I find the actions of the insurance companies here reprehensible. 

I’m sure this has nothing to do with the solvency of the insurance companies in question that they would engage in this practice. </sarcasm>

July 28 (Bloomberg) — The package arrived at Cindy Lohman’s home in Great Mills, Maryland, just two weeks after she learned that her son, Ryan, a 24-year-old Army sergeant, had been killed by a bomb in Afghanistan. It was a thick, 9-inch-by- 12-inch envelope from Prudential Financial Inc., which handles life insurance for the Department of Veterans Affairs.

Inside was a letter from Prudential about Ryan’s $400,000 policy. And there was something else, which looked like a checkbook. The letter told Lohman that the full amount of her payout would be placed in a convenient interest-bearing account, allowing her time to decide how to use the benefit.

“You can hold the money in the account for safekeeping for as long as you like,” the letter said. In tiny print, in a disclaimer that Lohman says she didn’t notice, Prudential disclosed that what it called its Alliance Account was not guaranteed by the Federal Deposit Insurance Corp., Bloomberg Markets magazine reports in its September issue.

Lohman, 52, left the money untouched for six months after her son’s August 2008 death.

“It’s like you’re paying me off because my child was killed,” she says. “It was a consolation prize that I didn’t want.”

As time went on, she says, she tried to use one of the “checks” to buy a bed, and the salesman rejected it. That happened again this year, she says, when she went to a Target store to purchase a camera on Armed Forces Day, May 15.

‘I’m Shocked’

Lohman, a public health nurse who helps special-needs children, says she had always believed that her son’s life insurance funds were in a bank insured by the FDIC. That money — like $28 billion in 1 million death-benefit accounts managed by insurers — wasn’t actually sitting in a bank.

It was being held in Prudential’s general corporate account, earning investment income for the insurer. Prudential paid survivors like Lohman 1 percent interest in 2008 on their Alliance Accounts, while it earned a 4.8 percent return on its corporate funds, according to regulatory filings.

“I’m shocked,” says Lohman, breaking into tears as she learns how the Alliance Account works. “It’s a betrayal. It saddens me as an American that a company would stoop so low as to make a profit on the death of a soldier. Is there anything lower than that?”

Millions of bereaved Americans have unwittingly been placed in the same position by their insurance companies. The practice of issuing what they call “checkbooks” to survivors, instead of paying them lump sums, extends well beyond the military.

Touching Americans

In the past decade, these so-called retained-asset accounts have become standard operating procedure in an industry that touches virtually every American: There are more than 300 million active life insurance policies in the U.S., and the industry holds $4.6 trillion in assets, according to the American Council of Life Insurers.

Insurance companies tell survivors that their money is put in a secure account. Neither Prudential nor MetLife Inc., the largest life insurer in the U.S., segregates death benefits into a separate fund.

Newark, New Jersey-based Prudential, the second-largest life insurer, holds payouts in its own general account, according to regulatory filings.

New York-based MetLife has told survivors in a standard letter: “To help you through what can be a very difficult, emotional and confusing time, we created a settlement option, the Total Control Account Money Market Option. It is guaranteed by MetLife.”

No FDIC Insurance

The company’s letter omits that the money is in MetLife’s corporate investment account, isn’t in a bank and has no FDIC insurance.

“All guarantees are subject to the financial strength and claims-paying ability of MetLife,” it says.

Both MetLife, which handles insurance for nonmilitary federal employees, and Prudential paid 0.5 percent interest in July to survivors of government workers and soldiers. That’s less than half of the rate available at some banks with accounts insured by the FDIC up to $250,000.

Bank of New York Mellon Corp. handles the paperwork and monthly statements for customers with MetLife “checking accounts.” The insurance company, not the bank, most recently reported holding about $10 billion in death benefits, in 2008.

The “checkbook” system cheats the families of those who die, says Jeffrey Stempel, an insurance law professor at the William S. Boyd School of Law at the University of Nevada, Las Vegas, who wrote ‘Stempel on Insurance Contracts’ (Aspen Publishers, 2009).

‘Bad Faith’

“It’s institutionalized bad faith,” he says. “In my view, this is a scheme to defraud by inducing the policyholder’s beneficiary to let the life insurance company retain assets they’re not entitled to. It’s turning death claims into a profit center.”

Prudential’s Alliance Account is helpful to families of soldiers, says company spokesman Bob DeFillippo.

“For some families, the account is the difference between earning interest on a large amount of money and letting it sit idle,” he says. Prudential follows the law, he says.

“We fully and regularly disclose the nature and terms of the account to account holders,” DeFillippo says. “We make it clear that the money can be withdrawn at any time by simply writing a draft.”

Read more at Bloomberg

I would say to those family members who find themselves in this situation, do not accept an insurance company giving you a ‘check book’.  Whether you want the money or not, demand the lump-sum payout.  Put it away and never look at it again if you don’t want to, but stop allowing the insurance companies and our government that bailed them out with your taxpayer money to profit from the deaths of those who gave their lives to protect our freedoms.

Bailed out Blankfein’s $41 million Hamptons pad.

Transparency piece from the Financial Times this morning.  The $400 Bilsky figure is just for Q1 of ’09.  BIS hasn’t gotten around to the other nine months of lies.

—

As many as five US banks failed to report hundreds of billions of dollars in credit derivatives bought from foreign counterparties during 2009, leaving those risks below the radar of regulators in the US and Europe.

The banks’ underreported exposures to credit default swaps came to light as the US Federal Reserve and the Bank for International Settlements were preparing first-quarter reports of the industry’s lending and risk activities. It was revealed as a footnote to the BIS report’s lengthy tables.

The BIS became alarmed at the discrepancy, according to one official familiar with the report.

“This underscores how little transparency there was and how much information was missing,” said one BIS official familiar with the report.

The missing exposures came from a group of financial institutions that were hastily granted bank holding company status in 2008 as panic engulfed the world’s financial system. The rapid conversion to bank status allowed them to borrow cash from the Fed, if needed, as liquidity threatened to dry up.

The mishap underlines how the conversion also introduced those companies to a raft of complex bank reporting standards, and raises new questions on the lack of scrutiny they faced under previous regulators.

The Fed, following a review of its quarterly report on cross-border risks, discovered that the group, which included Goldman Sachs, Morgan Stanley, American Express and CIT, only submitted claims on credit derivatives up to the amount where there was a corresponding position to hedge against. The additional risks, which totalled $400bn in the first quarter, were left out.

• Continue reading at the FT

The Daily Bail

Well, it’s a little late at this point, but it appears that Congress has now awakened to the fact that the Federal Reserve and the US Treasury Department seem to have been complicit in allowing Goldman Sachs to funnel taxpayer funds all over the world.  Certainly this is a landmark case of ‘horse and barn door’ – for anyone paying attention, we were screaming about this here on FedUpUSA when it happened, well over a year ago.  I guess better late than never?  Just remember where all those billions of dollars went for when your kids and grandkids ask you why the US government takes everything they earn.

Goldman Sachs received a $12.9 billion payout from the government’s bailout of AIG, which was at one time the world’s largest insurance company.

Goldman Sachs sent $4.3 billion in federal tax money to 32 entities, including many overseas banks, hedge funds and pensions, according to information made public Friday night.Goldman Sachs disclosed the list of companies to the Senate Finance Committee after a threat of subpoena from Sen. Chuck Grassley, R-Ia.

 Asked the significance of the list, Grassley said, “I hope it’s as simple as taxpayers deserve to know what happened to their money.”

 He added, “We thought originally we were bailing out AIG. Then later on … we learned that the money flowed through AIG to a few big banks, and now we know that the money went from these few big banks to dozens of financial institutions all around the world.”

 Grassley said he was reserving judgment on the appropriateness of U.S. taxpayer money ending up overseas until he learns more about the 32 entities.

 SETTLEMENT: Goldman Sachs admits it misled investors, pays $550M fine

GOLDMAN CONSENT: SEC vs. Goldman Sachs

JUDGEMENT: Final judgement of defendant

 Goldman Sachs (GS) received $5.55 billion from the government in fall of 2008 as payment for then-worthless securities it held in AIG. Goldman had already hedged its risk that the securities would go bad. It had entered into agreements to spread the risk with the 32 entities named in Friday’s report.

 Overall, Goldman Sachs received a $12.9 billion payout from the government’s bailout of AIG, which was at one time the world’s largest insurance company.

 Goldman Sachs also revealed to the Senate Finance Committee that it would have received $2.3 billion if AIG had gone under. Other large financial institutions, such as Citibank, JPMorgan Chase and Morgan Stanley, sold Goldman Sachs protection in the case of AIG’s collapse. Those institutions did not have to pay Goldman Sachs after the government stepped in with tax money.

 Shouldn’t Goldman Sachs be expected to collect from those institutions “before they collect the taxpayers’ dollars?” Grassley asked. “It’s a little bit like a farmer, if you got crop insurance, you shouldn’t be getting disaster aid.”

 Goldman had not disclosed the names of the counterparties it paid in late 2008 until Friday, despite repeated requests from Elizabeth Warren, chairwoman of the Congressional Oversight Panel.

 ”I think we didn’t get the information because they consider it very embarrassing,” Grassley said, “and they ought to consider it very embarrassing.”

 FINANCIAL REFORM: How Congress rewrote the regulations

FIXED? Will new regulations prevent future meltdowns?

FINANCIAL OVERHAUL AND YOU: Mortgages, debit cards, loans, more

 The initial $85 billion to bail out AIG was supplemented by an additional $49.1 billion from the Troubled Asset Relief Program, known as TARP, as well as additional funds from the Federal Reserve. AIG’s debt to U.S. taxpayers totals $133.3 billion outstanding.

 ”The only thing I can tell you is that people have the right to know, and the Fed and the public’s business ought to be more public,” Grassley said.

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