The welfare state rumbles on in corporate america, debts become more unpayable daily, pondering the metals correction, US Treasury near legal debt limit, governments extend the time lines of debt, legal actions in Madoff case, big fines to settle fraud case. Red flags all over Europe
The US welfare state rumbles on and in some sectors of business it is being encouraged. We have to assume this attitude is based on more and increasing profits. Needless to say, it is cloaked in language that refers to the poor suffering people. The economy in the US and in many other countries is being run by and for major corporate interests. It is called corporatist fascism. Not many truthfully call it that, but that is what it is. We have government paid for and controlled by wealthy corporatist interest. In America you have $14 trillion in short-term debt and $105 billion in long-term commitments. Then there is the off budget items, such as wars and occupations that adds considerably to this debt, all attuned to keep the welfare state running. Both parties refuse to cut much of anything, although the Republicans say they will. We are skeptical after watching the tax bill become an $862 billion pork stimulus package. Discretionary spending is where the cuts will probably occur if there are any.
The cost of carrying this debt becomes more unpayable and onerous daily and there is little attempt to stop it. The Fed may control the short end of the Treasury bond market, but it has minor influence on the 10-year notes and 30-year bonds. As a result yields have risen and the spread in yields between short and long-term paper has grown to 32-year highs. Needless to say, holders of long-term notes and bonds want to be better compensated because they see more risk, as US debt grows uncontrollably higher. Short-term yields have stayed about the same because the Fed controls them. The demand for capital in small and medium companies has been muted by lenders reluctance to lend for the past two years. Zero interest rates have not helped these potential borrowers that create 70% of the jobs. Funds though are readily available to the major transnational conglomerates. Government and the Fed won’t talk about it, but they are manipulating all markets, and that is a long-term negative factor because everything they do is for their own benefit – not for the people. The state of political affairs could be worse but they certainly are not good. We liken the US economy to a rudderless ship being pulled and jerked by one special interest group or another from side to side never gaining equilibrium. As long as this situation persists no headway will be made in solving budget deficits, nor in neutralizing the welfare state.
At the same time we see red flags all over Europe. It is pointed out that in Europe, Greece is uncompetitive and has a sodden public sector; that Ireland borrowed too much and was moving more to a welfare state; that Belgium was a house truly divided with financial problems; that Portugal’s economy lagged like that of Greece and has similar major budget deficits, and that Spain doesn’t have a diverse enough economy and was literally destroyed by one interest rate fits all. What no one wants to contemplate is why did this all happen? That is because banks lent them all as much money as they wanted. The bankers, the professionals, should have never lent them such outrageous sums in the first place. Now the banks with their bad loans are demanding they be bailed out. It is ludicrous and the banks should be allowed to go bankrupt, they are the experts. They knew exactly what they were doing. That is Europe’s solution and the quicker they realize it the better off the Continent will be.
As of this writing gold has fallen about $100, and silver some $3.00. Support for gold lies anywhere between $1,280 and $1,340. Many are disappointed that both metals corrected, which is natural, but they are more upset that the correction was deliberately man-made.
Part of the corrective process was that Germany supposedly was going to save the euro, or at least that is what jawboning Chancellor Merkel seems to think. Germany is not about to bail out six insolvent countries. If they do or even participate in spending of more than the original solvent euro nation commitment of $1 trillion, they may become insolvent as well. The German people are well aware of this and they won’t allow it to happen. As we reported in the last issue contingency plans are already underway to reintroduce the Deutsche mark if necessary. The euro zone countries are facing major funding all year, but the heavy end will be in the first quarter with lighter demands in the second quarter. Germany is not about to bail out sick members or the euro, especially with Irish elections coming in three weeks. Thus, we see no eminent moves by Germany.
Gold has spent the last two years moving up in price as it challenged the US dollar for supremacy as the world reserve currency. Now, inflation is again in investor’s sights, as companies are forced to raise prices 6% to 15%, after having raised prices over the past year mostly in the form of small packaging. We’d call that stealth inflation. Manufacturers and producers think they are fooling the American public, but they are not. They are just demonstrating how deceitful they are. Raw materials costs are rising and they will continue to rise and so will real inflation, and that makes gold and silver move higher to reflect the loss in purchasing power of the public and the loss of value of all currencies versus gold and silver. In our previous report this week we pointed out the massive short covering by commercials in the gold pits. Unprecedented net short reduction, which can only portent a major upward move in gold and silver. The percentage of silver short covering was not nearly as successful for JPM, HSBC, GS and Citi. That is still yet to come. It will expedite the upside as it has done recently. All the elitists have done is ended their short bias and now will join you on the long side of the market. Their tactics have given you another opportunity to buy at cheaper prices.
The bond market yields will move slowly higher on the long end for the remainder of the year and thus, bonds should move slightly lower.
Stocks, which are way overpriced, will eventually fall probably back to 10,000 on the Dow.
Conservative economists seem to think the economy will have a few years of stable to moderately deflating prices. We find that ludicrous with another $2.5 trillion being jammed into the economy. Even another deflationary down leg in real estate would not offset such spending, which follows $2.5 trillion spent under QE1 plus stimulus. That last attempt to increase employment was a failure. This time it will be the same unless there could be giant productivity gains, which is an unknown.
Recovery is difficult as savings persist at a 4% level. Wages are contracting as inflation increases sapping consumer purchasing power. Many countries are involved in currency wars and growth should slow sharply as tax breaks end. Small business, which saw lending fall 25% over the past two years are in no mood to borrow unless absolutely necessary, even if funds are available. There will be no aid from inventory buildup that was accomplished last year. Topping off resistance is an again falling real estate market, which does not tend to instill confidence. Then there is the possibility of $60 billion in budget cuts, which won’t be helpful to consumption. We cannot leave out forced austerity measures by municipalities and states. Perhaps including hundreds of bankruptcies. We also must consider illiquidity and major losses on the horizon for those holding municipal bonds as a drag on the economy. State budget shortfalls are more than $125 billion. Then consumers have to deal with tax increases that will curtail buying. We see political and social upheaval worldwide. The question is will it come to America? When we were in the brokerage business we always said when in doubt don’t. That is what is in process in America today. Chances are the market will correct and real interest rates will rise. All these factors mean it is going to be very difficult for GDP growth to exceed 2-1/4%, at a real cost again of $2.5 trillion.
The US Treasury Department announced on Thursday that it will shrink the amount of money it has on deposit at the Federal Reserve to fund emergency lending facilities because it is nearing the legal debt limit.
Beginning Feb. 3, Treasury will gradually decrease the balance in the Supplementary Financing Program to $5 billion from $200 billion. It can do so by letting short-term bills that finance it mature and not issue new ones.
A Treasury official, speaking to reporters on background, said the action was being taken because Treasury was running near the $14.294 trillion debt limit. As of Jan. 25, it had $14.015 trillion of debt outstanding so only about $279 billion of legal borrowing authority was left.
The Fed’s weekly H.8 report of banks’ assets & liabilities clearly shows that big banks are more hedge fund that lending institution and bank speculation is running amok.
For December, ‘bank credit’ is down 5.4% y/y with ‘consumer loans’ contracting 4.9% y/y. ‘Interbank loans’ collapsed 41.6%! ‘Total assets’ declined 3.5%. But ‘trading assets’ bubbled up 86.2%!!!!
What is even worse is ‘deposits’ have declined 4.3%, with ‘large time deposits’ tanking 19.7%; but ‘trading liabilities’ have surged a criminal 157.3%!!!
The surge in trading assets and liabilities, and leverage, commenced in Q2, which suggests that the necessity to generate profits was acute…This is the prime proof that Ben’s QE is a thinly veiled scheme to keep the big zombie banks afloat on the back of taxpayers.
Easy Al used the ‘carry trade’ to surreptitiously bailout the money center banks in the early nineties. Bennie Mae is using QE to surreptitiously bail out the big banks now.
And Ben, B-Dud and others in the Fed cabal have the temerity to say that QE is for the unemployed!
Goldman Sachs collected $2.9 billion from the American International Group as payout on a speculative trade it placed for the benefit of its own account, receiving the bulk of those funds after AIG received an enormous taxpayer rescue, according to the final report of an investigative panel appointed by Congress.
The fact that a significant slice of the proceeds secured by Goldman through the AIG bailout landed in its own account as opposed to those of its clients or business partners has not been previously disclosed. These details about the workings of the controversial AIG bailout, which eventually swelled to $182 billion, are among the more eye-catching revelations in the report to be released Thursday by the bipartisan Financial Crisis Inquiry Commission.
A deeply divided U.S. investigative panel issued a scathing critique of the culture of deregulation championed by Former Federal Reserve Chairman Alan Greenspan, saying the government had ample power to avert the financial crisis of 2007-2009 and chose not to use it.
The 10-member Financial Crisis Inquiry Commission's final report, released on Thursday, was endorsed only by its six Democratic members, undermining its impact as the post-crisis Dodd-Frank banking reforms are being implemented.
In the fight between pro-reform Democrats and anti-reform Republicans, the report and its accompanying dissents provide fodder for both sides, while highlighting partisan fault lines that today pervade political Washington, from financial regulation to health care to addressing the budget deficit.
A competing minority report from three Republican commission members, also released on Thursday, largely exonerates Greenspan, saying, "U.S. monetary policy may have contributed to the credit bubble but did not cause it."
Another report, from the 10-member commission's fourth Republican, focuses mostly on U.S. housing policy in explaining the origins of the crisis that rocked global markets, dragged the economy into a deep recession and unleashed reforms.
The unveiling of the three reports produced by the commission's warring members was seen by financial markets as a non-event. "The market is not really going to react -- the market already has a very good idea of what happened," said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel Inc in Cincinnati, which owns bank shares.
The mountain of interview notes and internal documents obtained by the panel, however, contained some revelations. For instance, Federal Reserve Chairman Ben Bernanke told the panel that the crisis put 12 of the 13 most important U.S. financial firms at risk of failure within a period of a week or two, and that it surpassed in severity even the Great Depression, a period in which he is a noted expert.
"As a scholar of the Great Depression, I honestly believe that September and October of 2008 was the worst financial crisis in global history, including the Great Depression," said Bernanke in a November 2009 interview with the commission.
"If you look at the firms that came under pressure in that period ... only one ... was not at serious risk of failure."
It was not disclosed which of the 13 top financial institutions Bernanke thought was not at risk of failure. Bernanke did say that Goldman Sachs was not immune.
"Even Goldman Sachs, we thought there was a real chance that they would go under," he said.
Payrolls decreased in 35 U.S. states in December, while the unemployment rate rose in 20, showing the labor market recovery is slow to gather momentum. New York led the nation with 22,800 job cuts last month, followed by Minnesota with 22,400 firings, and Florida with 17,900, figures from the Labor Department showed today in Washington.
The report is consistent with figures on Jan. 7 that showed a fewer-than-forecast 103,000 jobs were created nationwide last month even as unemployment fell. Federal Reserve policy makers meeting today and tomorrow are likely to reiterate a pledge to buy $600 billion in government securities through June to help lower unemployment and spur growth. “This kind of mixed picture, combined with some of the positives we’ve seen in retail sales and manufacturing data, rising credit, tells us we’re at a turning point,” said Steven Cochrane, director of regional economics at Moody’s Analytics Inc. in West Chester, Pennsylvania.
Other reports today showed consumer confidence rose more than forecast in January as Americans gained optimism over the outlook for jobs, while residential real-estate prices dropped in November by the most in a year.
U.S. employment expenses rose 0.4 percent in the fourth quarter, less than forecast and capping a year in which compensation posted the second-smallest increase on record. The 0.4 percent gain in the employment cost index from October through December matched the rise in the prior three months, Labor Department figures showed today. Labor costs last year rose 2 percent after a 1.4 percent increase in 2009 that was the smallest since record-keeping began in 1982.
Companies have been slow to add to their payrolls or offer higher salaries until demand strengthens further. Unemployment projected to remain above 9 percent this year and limited price pressures explain why Federal Reserve policy makers this week stuck to their plan to buy $600 billion in securities by June to spur the world’s largest economy.
The U.S. government’s budget deficit will widen this year to $1.5 trillion, according to a report likely to further inflame the debate in Washington over how to reduce the gap between spending and revenue.
The projected shortfall, up from last year’s $1.3 trillion, increased in part because of the cost of the $858 billion tax- cut measure passed in last year’s lame-duck session of Congress, according to the nonpartisan Congressional Budget Office.
The agency, in its semi-annual revision of the government’s budget outlook, said the 2012 deficit will narrow to $1.1 trillion. It projected the economy will grow this year by 3 percent and that the unemployment rate will fall slightly to 9.2 percent from 9.4 percent in December. It will remain above 8 percent for the duration of President Barack Obama’s term, the report said.
The agency painted a grim picture of the longer-term budget outlook. It said the government will run up $12 trillion in deficits over the next 10 years if Congress permanently extends the tax-cut package, slated to expire at the end of 2012, and continues other longstanding policies such as preventing scheduled cuts in Medicare payments to doctors.
By 2021, the agency said, the nation’s debt will rise to almost 100 percent of its gross domestic product, the highest since World War II.
“CBO’s report should be another wake-up call to the nation,” said Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat. “The fiscal challenge confronting us is enormous. To solve this problem, it will require real compromise and a great deal of political will.”
“We need to have both sides, Democrats and Republicans, willing to move off their fixed positions and find common ground,” Conrad said.
Purchases of new houses in the U.S. rose more than forecast in December, propelled by a record surge in the West as buyers in California may have rushed to qualify for a state tax credit before it expired.
Sales climbed 18 percent to a 329,000 annual pace, figures from the Commerce Department showed today in Washington. The percentage gain was the biggest since 1992, and was led by a record 72 percent jump in the West.
“The increase being driven by the West definitely looks suspicious,” said Daniel Silver, an economist at JPMorgan Chase & Co. in New York. “New-home sales are definitely lagging behind other economic indicators. As we see job growth and signs of economic stability, the housing market will improve, but when that will happen is hard to say.”
Following the industry’s worst year on record, builders may keep facing competition from a growing glut of foreclosed existing homes that is depressing prices. The lack of a sustained housing rebound and unemployment above 9 percent are among reasons Federal Reserve policy makers today said they’ll press on with a second round of stimulus that will pump $600 billion into financial markets by June.
Mortgage applications in the U.S. fell last week to the lowest level since November 2008, a reminder any housing recovery will take time to develop.
The Mortgage Bankers Association’s index of loan applications decreased 13 percent in the week ended Jan. 21, figures from the Washington-based group showed today. Both refinancing and purchase applications fell.
“Usually when rates go up, refinancing goes down,” Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts, said before the report. “We don’t see existing home sales any higher at the end of the year.”
Declining home prices and rising lending rates may prompt Americans to hold off on both refinance and purchase applications. Any lasting recovery in the housing market hinges on lowering unemployment, which had been at 9.4 percent or higher for 20 months, the longest since monthly records began in 1948.
The refinancing gauge dropped 15 percent to the lowest in a year, while purchase applications fell 8.7 percent to the lowest level since October, the mortgage bankers’ group said. The average rate on a 30-year fixed loan rose to 4.80 percent last week from 4.77 percent the prior week. The rate reached 4.21 percent in October, the lowest since the group’s records began in 1990.
At the current 30-year rate, monthly payments for each $100,000 of a loan would be $524.67 or about $13 less than the same week the prior year, when the rate was 5.02 percent. The average rate on a 15-year fixed mortgage declined to 4.12 percent from 4.16 percent.
The share of applicants seeking to refinance a loan fell to 70.3 percent last week from 73 percent the prior week.
Residential real-estate prices dropped in November by 1.6 percent from a year earlier, the biggest annual decline in a year, according to the S&P/Case-Shiller index of home values in 20 cities released yesterday.
Confidence among U.S. homebuilders has stagnated as builders are reluctant to start projects while foreclosures mount. The National Association of Home Builders/Wells Fargo sentiment index registered a reading of 16 in January, the same as the past two months, data from the Washington-based group showed last week. Readings below 50 mean more respondents said conditions were poor.
The applications data contrast with sales figures showing a pickup in demand. Purchases of existing houses increased 12 percent to a 5.28 million annual rate last month, the most since May, as more distressed sales took place following several months of foreclosures moratoriums, figures from the National Association of Realtors showed Jan. 20.
A report today may show sales of new homes rose 3.5 percent to a 300,000 annual pace last month, according to the median estimate of economists surveyed by Bloomberg before the Commerce Department report at 10 a.m. Purchases are hovering close to record low of 274,000 reached in August.
Lennar Corp., the third-largest U.S. homebuilder by revenue, is among companies bracing for a slow recovery. The Miami-based builder on Jan. 11 reported fourth-quarter profit that beat analyst estimates on cost cuts and earnings from its distressed-investing unit.
“The housing recovery will traverse a long and bumpy road,” Stuart Miller, chief executive officer, said in a conference call that day.
Interest rates on auto loans are hitting record lows, a boon to car buyers and a benefit to the nation's recovering auto industry.
The interest rate on a four-year loan for a new car averaged 6.21% in the latest weekly survey of major banks and thrifts, according to Bankrate.com. That's the lowest average rate in more than two decades of tracking. A few lenders are offering rates as low as 2.99%, says Greg McBride, senior financial analyst for Bankrate.com.
Edmunds.com says interest rates on new car purchases overall in December, including automaker-subsidized loans, averaged 4.16%, the lowest since the car-buying research site started keeping track of rates in January 2002.
Rates were a half-percentage point lower than in December 2009. Edmunds recorded the highest average new car loan rate at 8% in January 2006, when sales demand was higher and credit-rating standards looser.
If our prognostications are correct and we attain 14% inflation by the end of the year, that would put a real crimp in consumption. Those increases will come mainly in items that have to be used every day, such as food and petroleum based products. Gasoline is about $3.25 a gallon. It could go to $5.00 a gallon. Food prices could double based on commodity prices surging over the past nine months. There is no question that there is more money and credit in the system, but that does not guarantee growth or a strengthening economy, we saw that in QE1. GDP will rise as we pointed out simply because there is more liquidity in the system. That growth is caused by inflation, which is not lasting nor a reality. This is a patchwork system that does not reflect economic growth or a healthy economy.
What people must understand is that all governments are extending the time line on debt, which in the intermediate to long run they are creating a much bigger problem of greater magnitude and in the process debt of banks and other businesses, the anointed ones, is being shifted to the public. This debt is of the poorest quality, which means most of it will end up worthless. It is astounding the brazenness and arrogance of these elitists. They will soon discover that billions of people throughout the world know what their plans are.
Former Minnesota Gov. Jesse Ventura sued the Department of Homeland Security and the Transportation Security Administration on Monday, alleging full-body scans and pat-downs at airport checkpoints violate his right to be free from unreasonable searches and seizures.
Ventura is asking a federal judge in Minnesota to issue an injunction ordering officials to stop subjecting him to "warrantless and suspicionless" scans and body searches.
The lawsuit, which also names Homeland Security Secretary Janet Napolitano and TSA Administrator John Pistole as defendants, argues the searches are "unwarranted and unreasonable intrusions on Governor Ventura's personal privacy and dignity . and are a justifiable cause for him to be concerned for his personal health and well-being."
According to the lawsuit, Ventura received a hip replacement in 2008, and since then, his titanium implant has set off metal detectors at airport security checkpoints. The lawsuit said that prior to last November officials had used a non-invasive hand-held wand to scan his body as a secondary security measure.
But when Ventura set off the metal detector in November, he was instead subjected to a body pat-down and was not given the option of a scan with a hand-held wand or an exemption for being a frequent traveler, the lawsuit said.
The lawsuit said the pat-down "exposed him to humiliation and degradation through unwanted touching, gripping and rubbing of the intimate areas of his body."
It claims that under TSA's policy, Ventura will be required to either go through a full-body scanner or submit to a pat-down every time he travels because he will always set off the metal detector.
Ventura, who was Minnesota governor from 1999 through 2002 and is now the host of the television program "Conspiracy Theory," did not immediately return a phone message seeking comment.
Napolitano said in December that the new technology and the pat-downs were "objectively safer for our traveling public."
Robert Lappin, a Salem businessman and founder of the Lappin Charitable Foundation, is among nine plaintiffs who yesterday filed a class-action lawsuit, alleging negligence by federal securities regulators in the Bernard Madoff case.
The lawsuit, filed in federal court in New York against the Securities and Exchange Commission, seeks millions of dollars in restitution for the plaintiffs, who, according to their lawyer, lost a total of about $70 million in the Madoff Ponzi scheme.
“We’re saying the SEC was responsible, negligent, for the losses suffered by the plaintiffs,’’ said Howard Kleinhendler, the lawyer.
Lappin is suing in his capacity as trustee of the retirement fund of his real estate firm, Shetland Properties. The fund lost $5 million in the swindle. Lappin, 88, personally reimbursed the plan for those losses.
The Lappin Charitable Foundation, which supports programs for Jewish youth, also said it lost $8 million, but is not part of this suit. In an example of how complicated the math can be for victims, the trustee in the Madoff bankruptcy case last month sued Lappin to return $2 million in fictitious gains. It’s unclear whether those gains were reaped by the foundation, the business, or Lappin personally.
Lappin could not be reached late yesterday.
The suit, first filed in December, was refiled yesterday.
Merrill Lynch agreed to pay $10 million yesterday to settle fraud accusations by securities regulators.
The Securities and Exchange Commission had accused Merrill of fraud, saying the company misused private information from its customers to place trades on its own behalf and that the company repeatedly charged its customers trading fees without their knowledge. “The conduct here was clearly inappropriate,’’ Scott Friestad, the agency’s associate director for enforcement, said. “Investors have the right to expect that their brokers won’t misuse their order information.’’
Bank of America acquired Merrill in January 2009. The SEC said the conduct took place before the merger. Merrill has since adopted “a number of policy changes,’’ Bill Halldin, a Bank of America spokesman, said.
The agency’s charges stem from Merrill’s equity strategy desk, which ran the proprietary trading operation from 2003 to 2005.
Merrill’s proprietary traders received tips from colleagues on the company’s market-making desk about confidential customer trade orders, according to the SEC. The proprietary traders then used the information to place trades on the firm’s behalf.
“In doing so, Merrill misused this information and acted contrary to its representations to customers,’’ the SEC said.
BP Plc was accused by oil-spill victims’ lawyers of breaking civil racketeering law by engaging in acts that led to the worst such disaster in U.S. history.
“BP engaged in a pattern of fraudulent conduct directed at regulators from the inception of the Macondo project, continuing through and after the spill and to this day,” victims’ lawyers Stephen Herman and James Roy, said yesterday in a court filing in New Orleans. “BP’s fraudulent actions and omissions were part of a broader pattern of unlawful conduct that it has employed over the years to place profits over safety.”
Herman and Roy are liaison counsel for a committee representing plaintiffs in more than 400 lawsuits over personal and economic injuries caused by last April’s explosion of the Deepwater Horizon drilling rig off the Louisiana coast.
The rig, owned by a unit of Transocean Ltd., was drilling the well, named Macondo, for BP at the time of the blast. BP is the only company named as a defendant in the spill victims’ master civil complaint under the Racketeer Influenced and Corrupt Organizations Act, or RICO, originally aimed at organized crime.
Manhattan District Attorney Cyrus Vance Jr. said he wants harsher penalties, including mandatory prison time, for people convicted of major securities fraud in New York. Vance said in a speech at New York City Bar Association in midtown Manhattan yesterday that he will call on the legislature to change the Martin Act, New York’s securities fraud statute. He said he will seek prison sentences of as long as 8 1/3 years to 25 years for frauds involving more than $1 million. The crime now carries no minimum prison sentence, regardless of the money involved.
“The flexibility of the Martin Act and its utility in the battle against criminal fraud is marred by its overly lenient penalties,” Vance said in the speech, titled “White Collar Crime in 2011: The Martin Act, Cybercrime and Beyond.”.
The Martin Act was wielded by Eliot Spitzer and Andrew Cuomo when they served as attorney general, against investment banks and the mutual-fund industry. Robert Morgenthau, Vance’s predecessor in the Manhattan DA’s office, used the law to prosecute white-collar crime.
Vance said he plans to make broader use the Martin Act in the coming year to prosecute investment frauds and Ponzi schemes involving investment funds; fraud schemes that target broker- dealers; the manipulation of commodities and commodities futures and insider trading in securities and commodities.
He said he wants penalties to conform to larceny statutes, which distinguish between $1,000, $3,000, $50,000 and $1 million thefts. He also wants to increase the time allowed to bring criminal charges.
A high-level market manipulator who deprives the investing public of hundreds of millions of dollars is currently subject to the same penalty as a broker who fraudulently deprives one customer of $500, Vance said.
“In either case, a state court judge would be authorized to impose a non-incarceratory sentence,” Vance said in the speech.
The Martin Act, enacted in 1921, grants authority to investigate and prosecute, as the state’s Court of Appeals stated in 1926, “all deceitful practices contrary to the plain rules of common decency.” To violate the law, no sale or purchase is necessary if there are lies or deception in the offering of securities. Intent to defraud also is not required.
Vance said he isn’t the first Manhattan District Attorney to complain about the Martin Act, which in its original form lacked criminal provisions.
“It is said the Martin Act has teeth,” he quoted then- Manhattan District Attorney Joab Banton as saying in 1925. “It has, but they are an ill-fitting set of false teeth.”
Bank Of America has been ordered to stop all foreclosures in Nevada a non-judicial state. The judge ruled they can only foreclose with a judges order, which is only for judicial state foreclosures. The non-judicial states do not need court orders for foreclosing, the companies can simply foreclose after advertising the foreclosure for 4 weeks. The non-judicial foreclosure states will have law firms and companies which represent the banks and become the trustees for foreclosing. In Nevada that firm seems to be ReconTrust, which handles the foreclosures for banks.
By a lawsuit going against ReconTrust who is handling foreclosures in Nevada for banks, hopefully all foreclosures will have to be stopped, not just Bank of America's foreclosures.
It is amazing how people think the foreclosure crisis is behind us and it is all straightened out, because MSM does not mention it anymore. Yet there is more going on then ever before and more and more rulings FOR THE PEOPLE by judges. Some judges still rule for the banks, but I would think in appeals, the correct ruling by law will have to be applied and thus it should be for the homeowner. I linked a New Jersey ruling below, which was for the bank, yet it went against all laws and rights.
John Christian Barlow, a lawyer who represents North, said the lawsuit claims ReconTrust doesn’t have the authority to foreclose on homes in Nevada. Bank of America and other banks use ReconTrust to seize homes in Nevada, he said. Barlow said he will seek class-action, or group, status for the lawsuit.
In Tennessee and Arkansas I know it is a law firm named Wilson and Associates who become the trustee and substitute trustee to foreclose on people for the banks.
Every state is different and what is a shame is a judge in New Jersey is allowing foreclosures when the note is not available, which says who is owed the debt. I certainly hope the people appeal this ruling by that judge. As that goes against all laws and rules of foreclosures.