http://www.nakedcapitalism.com/2015/04/joe-firestone-another-danger-tpp-sacrifices-monetary-sovereignity.html

By Joe Firestone, Ph.D., Managing Director, CEO of the Knowledge Management Consortium International (KMCI), and Director of KMCI’s CKIM Certificate program. He taught political science as the graduate and undergraduate level and blogs regularly at Corrente, Firedoglake and New Economic Perspectives. Originally published at New Economic Perspectives

Right now the US fulfills the three essential conditions for monetary sovereignty:

1) it issues its own non-convertible currency,
2) which it allows to float on international currency markets; and
3) it owes no debts in any currency other than dollars.

Because it is monetarily sovereign, and can always meet its obligations the US can never be forced into insolvency. It can become insolvent due to Congressional decisions such as failing to raise or repeal the debt ceiling, or Executive decisions such as failing to use its platinum coin minting authority to fill the public purse and then pay its bills once it has reached the debt ceiling. But again, it cannot be forced into (in)solvency by external financial or economic factors that are beyond the control of the Federal Government (including the Congress). Monetary sovereignty is of tremendous value to us. As long as the United States retains it, then for example, we can never become Greece, or for that matter, Weimar Germany, since the latter’s hyperinflation was in large part caused by the fact that it owed its war reparation debts in goldmarks, or in currencies convertible to gold, and could not repay them in its own non-convertible currency, the Mark, which it could freely issue.

It also means that the US has greater policy space for deficit spending and debt issuance than nations that have given up their currency, have fixed exchange rates, and owe debts in foreign currencies whose price in international markets it cannot control. Given all the current problems of the US that may require deficit spending to solve, giving up monetary sovereignty is a monumentally risky thing to do, and exhibits the casual and foolish thoughtlessness of the President proposing it and the Congress seriously considering the Trans- Pacific Partnership (TPP) Agreement. Passing the TPP would compromise the monetary sovereignty of the United States and subject us to the influence of currency markets on the prices we may have to pay for foreign currency under a plausible scenario allowed by the Agreement. Specifically, I don’t see anything in the TPP investment chapter requiring that damages be awarded by the Investor State Dispute Settlement (ISDS) tribunals in the sovereign currency of nations incurring damage awards for lost profits, but only that they be awarded in a “freely usable currency” as specified by the IMF. So, complainants in these tribunals could ask for and win damages payable in foreign currencies, rather than US dollars, which the US would then owe in that foreign currency.

So, it flows from these considerations that passing the TPP would create the conditions for ending US monetary sovereignty for the first time since the international gold window was closed in 1971. The seriousness of this compromise of monetary sovereignty would depend upon the frequency and magnitude of judgments against the United States Government. So, how bad can it get? No one knows. But we do know that “ . . . the TPP would empower another 25,000 foreign corporations to use the investor state tribunals, against the United States" . . . an expansion many times the US’s current level of exposure. We also know that Ecuador is currently facing a judgment against it awarded to Occidental Petroleum in the amount of $2.3 Billion for Ecuador’s lawful termination of a contract for drilling rights. For Ecuador, a judgment of that size is comparable to one of $340 Billion against the United States, denominated in a foreign currency it cannot issue. (The Dollar is Ecuador’s unit of account and official currency right now, but, of course, it is a currency Ecuador cannot issue.) If you think this possibility is far-fetched, consider that ISDS actions are a business for multinational corporations experiencing rapidly accelerating and perhaps exponential growth. They and the ISDS Courts, staffed by lawyers who play the roles of judges for those Courts one day, and representatives of the potential plaintiffs in these Courts the next, have little incentive not to expand this line of business to the maximum the traffic can bear. Here’s what Elizabeth Warren thinks about this issue:



The deficit terrorists among us worry needlessly all the time about the bond vigilantes driving bond interest rates beyond what is fiscally sustainable for the United States, and use this argument to call for crippling deficit reduction and austerity, even though they must know by now that the result is economic stagnation and growing inequality. But they are strangely silent about what the TPP’s attack on US monetary sovereignty, making us subject to market-determined prices of foreign currencies, would do to fiscal sustainability, and equally silent about the issue of whether the compromising of our monetary sovereignty is fiscally responsible or not. It looks like they don’t care about fiscal responsibility and fiscal sustainability when it comes to a choice between these things and the possible frustration of the “expectations of profits” of multinational corporations.

Which brings us back to our erstwhile Representatives and Senators in Washington. How they can even consider Fast Track Authority for the President without extensively considering and debating the sovereignty-infringing aspects of the TPP is beyond me. Its potential infringement on Monetary Sovereignty is only one of these. There are many others, as well. And it is hard to understand how people who swear fealty to the United States can justify their apparent complete lack of concern for these issues when they make trade agreements.

http://www.bloomberg.com/news/articles/2015-04-23/deutsche-bank-to-pay-record-2-5-billion-to-resolve-libor-probes

Deutsche Bank AG was ordered to pay a record $2.5 billion fine and fire seven employees to settle U.S. and U.K. investigations into its role in rigging Libor.

Deutsche Bank must terminate six London employees and one in Frankfurt who engaged in wrongful conduct, according to New York's Department of Financial Services, which was among the international regulators involved in the settlement announced Thursday. While the DFS didn’t identify them by name, one is a managing director, four are directors and two are vice presidents. A U.K. unit agreed to plead guilty to a wire-fraud charge as well.

“Deutsche Bank employees engaged in a widespread effort to manipulate benchmark interest rates for financial gain,” DFS Superintendent Benjamin Lawsky said in a statement. “We must remember that markets do not just manipulate themselves: It takes deliberate wrongdoing by individuals.”

The penalty is the biggest yet in the interest-rate rigging scandal and eclipses that paid by UBS Group AG. The agreements, detailing repeated misconduct by employees as well as the bank’s own foot-dragging in dealing with investigators, deal a set-back to Co-Chief Executive Officers Anshu Jain and Juergen Fitschen as they prepare to announce their plan to overhaul Deutsche Bank.

REGRETS FOLLOW...SO BRITISH!

http://www.bloomberg.com/news/articles/2015-04-26/the-rumble-in-riga-how-the-eu-lost-patience-with-varoufakis

When Yanis Varoufakis warned his fellow euro-area finance chiefs of the dangers of pushing his government in Athens too far, Peter Kazimir snapped. Kazimir, Slovakia’s finance minister, launched a volley of criticism at his Greek counterpart, releasing months of pent-up frustrations among the group at the political novice. They’d had enough of what they called the economics professor’s lecturing style and his failure to make good on his pledges. The others at the April 24 gathering in Riga, Latvia, took their cue from Kazimir -- they called Varoufakis a time waster and said he would never get a deal if he persisted with such tactics. The criticism continued after the meeting: eight participants broke decorum to describe what happened behind closed doors. A spokesman for Varoufakis declined to respond to their descriptions.

“All the ministers told him: this can’t go on,” Spain’s Luis de Guindos said the following day. “The feeling among the 18 was exactly the same. There was no kind of divergence.” The others who provided an account of the meeting in interviews asked not to be named, citing the privacy of the talks.

Varoufakis’s isolation raises the stakes, which include a potential default and keeping the euro indivisible. After more than five years as a ward of the European Union, Greece is virtually out of cash. The aid pipeline is shut until Prime Minister Alexis Tsipras, elected Jan. 25 promising to push back against budget cuts, bends to EU policy demands.

Alluding to the political conflict, Varoufakis borrowed a line from a 1936 speech by U.S. President Franklin D. Roosevelt. “They are unanimous in their hate for me; and I welcome their hatred,” Varoufakis said on his Twitter account on Sunday. The quotation is “close to my heart (& reality) these days,” he wrote...

UNFORTUNATELY, YANIS ISN'T FDR...

http://www.ekathimerini.com/4dcgi/_w_articles_wsite3_1_22/04/2015_549298

How can it be that the average Greek does not realize the dangers facing the country? It’s a good question, and the answers to it are pretty obvious.

The January elections were followed by a mood of euphoria which is now easing, albeit slowly. Over the past few months, many Greeks have not payed taxes or loan installments. TV news bulletins are no longer dominated by recurring footage of troika officials going in and out of Athens ministries, which created a sense of collective humiliation. A large number of people were also happy because, as they saw it, our guys finally “had a go at” the country’s lenders.

After five years in crisis, a certain denial of reality is to be expected. The problem of course is that we cannot expect to move forward without making tax and loan payments, without some form of troika, and simply having Greek government officials criticizing senior European officials. The public coffers are running dry, lenders are turning into zombie banks, and some hardworking foreign technocrats are busy calculating the cost of all this, which we will one day have to pay.

Meanwhile, the government is making a very big mistake, for which it will pay dearly. No one can question its deft communication tactics. They are unprecedented and, from a technical viewpoint, admirable. But there comes a point when you cannot invert reality any longer; doing so will only cause you more harm. Greeks have always punished those who played with the truth in the end.

Now it is time to start a new round of educating people about who is with us and who is not, what is not a feasible compromise and what is not. It is not possible to advertise “Obama’s support” one day and then have the US president urge Greece to curb red tape and reform its labor market.

Every leader who has an idea of what direction he wants to go in ought to speak truthfully about where the country really stands and the compromises which are required in order to stay in the eurozone. We have already seen what Beijing, Moscow and Washington had to offer. We are faced with European leaders, the International Monetary Fund and Washington calling for a compromise that a section inside SYRIZA will find very hard to swallow. Sure, Noam Chomsky and Joseph Stiglitz may be on our side, but their contribution means nothing in terms of financial support.

Prime Minister Alexis Tsipras has a very clear idea of what is going on and what is at stake. Greek voters are starting to realize that this brief grace period is running out. The country is in for a rough landing in the coming weeks. The pilot must choose whether he will let the passengers remain ignorant or whether he will warn them about what is to come. The responsibility is all his.

http://www.economist.com/news/finance-and-economics/21649476-greece-could-alleviate-its-shortage-cash-issuing-ious-only

FOR the third time in five years, Greece is looking into the abyss. As in 2010 and 2012 the Hellenic Republic looks likely to run out of cash, and may soon miss scheduled debt repayments. But this time Syriza, Greece’s new ruling party, has alienated its creditors, making the previous solution (a co-ordinated default, coupled with a bail-out) harder to achieve. Yet a unilateral default might prompt the European Central Bank to withdraw its lifeline from Greece’s banks, leaving the country little choice but to abandon the euro—an outcome 84% of Greeks want to avoid. As Syriza scrabbles around for alternatives, a monetary trick sometimes used in such emergencies—issuing temporary IOUs, or “scrip”, in lieu of cash—is starting to look tempting.

Scrip can help governments conserve hard cash, something Greece certainly needs to do. It has debts of around €315 billion ($340 billion)—175% of GDP—and must make payments of €2.5 billion before the end of June. To find that cash it could start making some of its regular payments in paper IOUs, which can be used to pay taxes at a later date, rather than euros. The bulk of the Greek state’s annual outgoings of €80 billion is paid to its citizens—€22 billion in salaries, €35 billion in benefits. They would have little choice if the government decided to pay them in scrip instead of euros. If all government salaries had been paid in scrip last year, the country would have had a surplus of €27 billion euros, leaving plenty to pay back foreign creditors. Scrip itself would soon become a means of exchange.

Scrip has a rich history. Massachusetts paid its citizens “tax anticipation notes” instead of cash in the 1690s, according to a paper* by Richard Sylla of the Stern School of Business at New York University. These were swapped for cash once the anticipated tax had been collected. California used scrip in 2009. The recession had sapped revenues, and bickering legislators could not agree on a revised budget. The state began to pay benefits, tax rebates and other bills in “registered warrants” rather than dollars. In all, it issued 450,000 IOUs with a value of $2.6 billion.

California made the scrip more palatable by promising to pay annual interest of 3.75% on it. This persuaded some recipients to hold on to it, meaning that Californian residents were, in effect, lending to the state. For those who wanted cash, local banks initially agreed to exchange the scrip for dollars, thereby acquiring the right to the interest due. Within two months the budget impasse was over and the scrip was redeemed. That was only just in time: the big banks, worried about their growing exposure to the scrip, had stopped buying it.

Greek scrip would face bigger problems. California’s economy is eight times the size of Greece’s and its decent credit rating lent its IOUs some credence. A better analogue for Greece, which has an unemployment rate of 26% and a reputation for default, is Argentina. In 2001 the Argentine government, struggling to service its debts, started paying its citizens by issuing a tax voucher, the lecop. The country’s provinces began to pay salaries and pensions in scrip. According to IMF analysis the value of these new quasi-monies rose to 7.5 billion pesos ($2.4 billion) by the end of 2002, or around 50% of the value of pesos in circulation....MORE

http://www.wsj.com/articles/eurozone-finance-ministers-contemplate-plan-b-for-greece-1429963682


Statements by Slovenia and German finance ministers break long-held taboo over possible exit of Greece from eurozone...Some eurozone finance ministers on Saturday acknowledged for the first time that they are considering plans on what to do if no deal on Greece’s future financing can be reached by the end of June.

The statements by the finance ministers of Slovenia and Germany break a long-held taboo during eurozone crisis talks, where policy makers have been insisting that they are entirely focused on keeping Greece in the currency union with the help of more bailout loans....

http://www.reuters.com/article/2015/04/25/ubs-group-greece-idUSL8N0XM04W20150425

UBS's chairman said a default by Greece is seen by the International Monetary Fund as "systemically controllable" and he believed it would have a negligible impact on the Swiss bank itself, according to a newspaper interview published on Saturday.

Athens is lurching closer to bankruptcy, with its next big test on May 12, when it is due to pay 750 million euros to the IMF. Euro zone finance ministers told Greece on Friday that its leftist government would get no more aid until it agreed a complete economic reform plan.

In an interview with Neue Zuercher Zeitung, the chairman of Zurich-based UBS, Axel Weber, addressed the alternative if euro zone and Greek officials fail to reach an agreement.

"I've just come from a meeting of the International Monetary Fund. There, the consensus is increasingly that a Greek default would be systemically controllable," Weber said in the interview, without elaborating.

Weber is the former head of Germany's central bank, during which time he also served as the German governor of the IMF. He has been chairman of UBS since 2012.

Weber said the Swiss bank had reduced its exposure to Greek debt long ago, and that thus a default would have negigible consequences.

The impact of a potential Greek default is the biggest risk to the euro zone's economic recovery after a long crisis from which the 19-nation currency area is finally emerging.

Unlike at the height of the crisis in 2011-12, economists believe the euro zone is far better placed to withstand any Greek default because the currency bloc has its own bailout fund, support from the European Central Bank and a banking union that can protect banks from crisis fallout.

Sadly, they try to paint the whole crisis as Greece's fault, raging on Varoufakis mainly for someone to blame, but here and there it remains undeniable that Syriza has the people of Greece as their main focus & the people of Greece remain in support of Syriza.

Varoufakis is absolutely keeping Greece in the EU or hoping to, remaining true to the people's wishes, while at the same time being urged by economists everywhere to leave. Understandably the people want no more austerity & no further suffering via leaving the EU. Haven't they been through enough, shouldn't they think of themselves as survivors at this point? Cut the cord & be done with it. Easy for me to say.

This talk of a default will not hurt the EU? Utter rubbish...but then, it has also been stated a default does not necessarily mean an exit and vice versa, and now kicking the can down the road is good strategy? Yeah, when all else is gone...seems fear is creeping in, the can will no longer be kicked...May will be here soon, and all eyes remain on Greece...I'm thinking the EU knows this one is going to hurt, because the disease may be contagious.

This year, far too many people are insane. I see it locally, nationally, internationally.

De Nial is rising and flooding every shoreline, Reality is biting a lot of a**holes where it really hurts.

Where will it go? When will it end? How does anyone make the turning point happen?

I wish I were psychic. But I'll just have to settle for being a pessimist. It won't go anywhere, just sit and fester, it won't end so much as become unsustainable and collapse. And nobody of any consequence or power will lift a finger to prevent, direct, or otherwise mitigate the madness that is enveloping the affairs of People.

A time of burning comes....

MY BELATED CONTRIBUTION TO THE WEEKEND TOPIC--DEMETER

http://www.bloomberg.com/news/articles/2015-04-24/meet-the-richest-person-in-the-world-s-happiest-place

Ernesto Bertarelli has every reason to be happy. His $15.8 billion fortune makes him the richest person in Switzerland, the world's happiest place, according to a new survey. The World Happiness Report 2015 names the alpine nation of 8 million people as the happiest country in the world, followed by Iceland, Denmark, and Norway. Seven of the top-10 happiest countries on earth are in northern Europe, while the other three are Canada, Australia, and New Zealand.

Bertarelli's fortune is the 54th biggest in world, according to the Bloomberg Billionaires Index. Italian born, Bertarelli, his family, and their pharmaceutical company Serono moved to Geneva in the 1970s. By 1996, Ernesto was running the company and by 2006 had sold his family's 64.5 percent stake to Merck for $8.6 billion. These days he has about 80 percent of the family wealth in cash investments, according to the index, and acts as chairman of Geneva-based Waypoint Capital.

He's best known for his yachting exploits. In 2003, his racing team, Alinghi, was the first European squad to win the America's Cup. The billionaire is married to Kirsty Bertarelli, a former singer and Miss U.K. winner who wrote her hit song Black Coffee as a love song to her husband.

He's the only one of Switzerland's three people on the Bloomberg list of the the world's 200 richest people to increase his fortune in 2015. Denmark has one person in the ranking, Kjeld Kristiansen. His $7.8 billion fortune, derived mostly from the Lego Group, has risen $1.4 billion in 2015. Iceland and Norway have no billionaires among the 200 richest. The U.S., which has 67 people among the world's 200 richest who control $1.3 trillion between them, is ranked as the 15th happiest nation, just below Mexico and one spot above Brazil.



Research for the post is derived from Bloomberg Billionaires Index data.

http://www.theautomaticearth.com/2015/04/europe-has-completely-lost-it/

After the high-level EU summit on the migrant issue, hastily convened after close to a thousand people drowned last weekend off the Lybian coast, Dutch PM Mark Rutte was quoted by ‘his’ domestic press as saying ‘Our first priority is saving human lives’. That sounds commendable, and it also sounds just like what everybody knows everybody else wants to hear. One can be forgiven, therefore, for thinking that it’s somewhat unfortunate that the one person tasked by Brussels with executing the noble ‘saving lives’ strategy, doesn’t seem to entirely agree with Rutte:



To refresh your memory, the Triton border patrol mission took the place late last year of Italy’s Mare Nostrum mission, which ended in October 2014. For good measure, the budget was slashed from the €9.5 million per month Italy had been putting in, to €2.9 million per month. Saving lives can be simply too expensive when you think about it in your high rise office in that brand new €1 billion+ EU building. These are hard economic times, and we all need to make sacrifices and to cut costs wherever we can...But of course after that summit, Europe announced it was going to triple the budget for the Triton mission. That will of course only simply bring back the budget to where it already was before it was cut by two-thirds, but it’s a nice headline anyway.

The difference in focus between Rutte and Frontex head Leggeri can be found all around Europe. It would be nonsense to claim Europe agrees on much of anything regarding the refugee issue. Well, they agree it’s a nuisance that all these people die and Europe is supposed to do something. The national government leaders would like it much better if such things didn’t happen, it’s bad publicity. But at the same time, it’s nothing that can’t be spun and turned to their advantage. Or so they like to think.

Reactions to the statements released after the summit were not all positive, to say the least. Amnesty said that the only thing Europe tries to save is its face. Former Belgian PM Guy Verhofstadt, at present a member of the European Parliament, indicated that the equipment Frontex has at its disposal (one helicopter, two ships and seven planes) wouldn’t even be enough to survey the Belgian coast (of which there’s not a lot). Just to make sure his peers wouldn’t think he’d gone all soft, Rutte came with another catchy one-liner: “Last time I checked, Libya was in Africa, not Europe.” In other words, ‘saving lives’ is a great press quote, but don’t blame him for lives lost. And that’s the crux behind the shift from Italy’s mission to the EU’s. The former was patrolling off the coast of Libya, while the latter occupies itself only with the European coastline, and it just so happens that’s not where refugees’ lives are under threat (let’s stop saying migrants, that’s a grossly misleading term). In its infinite wisdom, the EU has decided in its summit that there will be 5000 ‘resettlement’ places available for the hundreds of thousands of refugees (migrants) that want to go to Europe. The EU in a post-summit statement said it expects 150,000 refugees this year, but it might as well add up to 500,000 in 2015 alone. How Brussels thinks it’s going to send back almost half a million people is a big question mark. So much so we’d put our money on no-one having properly thought it over.

According to the United Nations High Commissioner for Refugees, millions of refugees are making their way to the Mediterranean from trouble spots across Africa. To put it in somewhat cynical economic terms, think of this as pent-up demand. And also don’t forget how Patrick Boyle framed it: “We fear the arrival of immigrants that we have drawn here with the wealth we stole from them.”

The typical story of the refugees is one in which it takes years to get from their mostly sub-Saharan homes to the Libyan coast, working odd jobs on the way. Once they get to Libya, which has been shot to bits by western forces, they’re dependent on all sorts of militia, who often arrest them, take their money etc. Perhaps the most insulting thing to come out of Brussels is the comparison with Somali pirates, and the argument that the refugee stream should be dealt with in the same way. Indeed, much of the European ‘leadership’ have emphasized one approach more than any other: send in the military, start shooting. The idea being that if the boats of the traffickers are destroyed, everything will return to ‘normal’. But the issue here is not the traffickers, it’s the refugees. Want to send in the military against them too?

If there’s anything good that can come from the deeply deplorable death of far too many poor sods in the Mediterranean, it’s that it shows us all once more, as if we needed further confirmation, what a dysfunctional entity – morally as well as practically – the European Union is. More than anything, the EU makes itself entirely irrelevant. There is no decision structure in Brussels, since there is no ultimate responsibility that has been assigned. And they all sort of like it that way for now, because it means everyone can deflect that responsibility if and when necessary. From the first example above that should be very clear: Rutte says the first priority should be saving lives, but the man who leads the organization that is tasked with executing it, flatly denies that.

Greek news organization Kathimerini ran a piece this week that serves to add yet another level of cold cynicism. Lest we forget, it’s Europe’s poorest countries that are forced to deal with the brunt of the refugee problem. In that summit we mentioned before, half of all European nations refused to take up even one single refugee. Yet another example of the absolute lack of coherence and solidarity that so-called union exhibits. The idea seems to be: Let ‘em all stay in Greece, while we suffocate the nation financially. But Greece cannot solve the issue all by itself, it can’t handle the expected 100,000 refugees on its own. It will be forced to open its borders and tell the refugees to try and reach Germany or France. The present EU policy is that a refugee must stay in the country where (s)he has been registered. Hence, all Greece and Italy need to do is not register them. Kathimerini:



Why Greece or any other country would wish, be eager even, to be part of the EU is becoming ever harder to comprehend. The moral values prevalent in Brussels, whether it comes to EU policies regarding Ukraine, Greece or the refugees’ dilemma, don’t seem to be shared in any individual European nation (if anything, they’re reminiscent of what various extreme right wing parties espouse). And as the Greek negotiations with the eurogroup and the ‘institutions’ show us with intense and increasing clarity, the notion of the euro being a boat to lift all tides turns out to be full-on bogus. Southern Europe’s nations will be either thrown out or allowed to stay only as debt servants. For now, Germany and Holland prefer to keep everyone on board, but that may still change. It would therefore seem like a good idea for Greece and Italy to make their moves while they can. In order to achieve that, however, they must convince their people that staying in the EU, and in the eurozone, is a bad choice. And since their old-time political establishments will continue to deny this (because the EU allowed them to sit fat and pretty), that will not be an easy task. Perhaps the refugee issue can help.

In all likelihood, the victims of the sunken boat near the Libyan coast this weekend will never be identified, except for perhaps a handful. Nobody knows who they are, and those who do stayed behind a thousand miles or more away. These deceased people, most of whom will never even be buried ashore, define, in one fell swoop, the ‘new’ price of a human life. Theirs, yours, and everyone else’s. Sinking nameless to the bottom of the sea, with no-one either ever knowing who you are or aware of how you are doing. That is our new valuation of a human being. It’s price discovery in its most cynical sense, it’s how assets get re-priced in markets.

What Tsipras and Varoufakis must accomplish is to make people understand that what Europe does to the refugees, it will do to its own citizens too.

http://www.freep.com/story/money/business/michigan/2015/04/23/quicken-fha-hud-lawsuit-mortgages-gilbert/26258541/

The U.S. Justice Department sued Quicken Loans Thursday alleging the Detroit mortgage lending giant had improperly originated and underwrote mortgages insured by the Federal Housing Administration.

The complaint, filed in the U.S. District Court in Washington, D.C., alleges that from September 2007 through December 2011, Quicken knowingly submitted, or caused the submission of, claims for hundreds of improperly underwritten FHA-insured loans.

The government is claiming that Quicken encouraged its employees to disregard FHA rules and falsely certify compliance with underwriting requirements in order to reap the profits from FHA-insured mortgages. For example, the government's complaint states that when Quicken received an appraised value for a home that was too low to approve a loan, Quicken often requested a specific new and higher value from the appraiser with no justification for the increase. That practice is prohibited by FHA rules.

Jay Farner, president and chief marketing officer of Quicken Loans, said in a phone interview Thursday evening that Quicken would not settle the case but would defend itself against the charges.

"We can't agree to charges that are blatantly false," he said. "We will continue to fight for what's right."

And he added that Quicken's practices were the "gold standard" for processing FHA loans.

FOOL'S GOLD, PERHAPS...MORE

http://www.washingtonpost.com/opinions/the-trans-pacific-partnership-trade-deal-is-an-abomination/2015/04/24/903e5a12-ea85-11e4-aae1-d642717d8afa_story.html

No, President Obama, Elizabeth Warren isn’t wrong.

Obama told MSNBC’s Chris Matthews on Tuesday that the populist Democratic senator from Massachusetts is in error in opposing a free-trade agreement his administration has been negotiating with 11 other Pacific nations. Warren is right: The Trans-Pacific Partnership (TPP) is an abomination — not because of the deal itself, and not because free trade in general is a bad idea. The TPP is an abomination because Obama had a chance to protect American workers from the harm that would inevitably come from such a pact, and he didn’t take it, or at least he hasn’t. As bad, Obama’s anointed successor, Hillary Clinton, waffled on the trade pact this week, offering only the banality that “any trade deal has to produce jobs and raise wages” — which, of course, they all claim to do. Clinton, and Obama, should champion the trade bill — but only after congressional Republicans do what’s needed to protect low-wage American workers from the dislocation that will occur: approving some serious new spending on worker training and infrastructure to keep the United States in line with the rest of the industrialized world.

Now, more than 20 years after NAFTA and 14 years after China joined the World Trade Organization, there is no real question among economists that expanding trade has been good for the world and has helped reduce poverty. It has also unquestionably been good for U.S. corporations as they grow their global reach. But there is equally no doubt that trade liberalization has hurt low-skill manufacturing workers and aggravated income inequality, which is now at its worst since the 1920s. The top 1 percent of U.S. earners has seen income grow by 200 percent since the late 1970s, according to the Congressional Budget Office, but the figure is only 48 percent for the bottom 20 percent. And there is really no disputing that at least some of that growing divide between rich and poor has been caused by the regressive effects of trade.Thea Lee, a trade economist who is deputy chief of staff at the AFL-CIO, argues that 40 percent to 60 percent of that growth in income inequality is because of globalization, including free-trade deals. That may be high, but even Peter Petri, a pro-trade finance professor at Brandeis University whose research is often cited by business, estimates 10 percent to 20 percent of the increase in income inequality can be attributed to trade overall.

...Obama had a rare opportunity to force major congressional action on worker training and infrastructure, by tying it to the Pacific trade pact, which Republicans broadly support. He had leverage — and he failed to use it.

Now the noncommittal Clinton, in deciding whether to weigh in on the trade bill, faces the first real test of her candidacy. Her decision will demonstrate whether the Warren-style populism that has crept into her stump speech is real, or just talk.

SORRY, DANA, THERE'S NOT ENOUGH LIPSTICK IN THE WORLD TO PUT SEX APPEAL ON THIS PIG OF A TREATY....IT CANNOT BE "FIXED" BY ANY MEANINGFUL DEFINITION OF THE WORD.

http://www.ianwelsh.net/obama-tries-to-make-his-bones-again-with-the-trans-pacific-partnership/

Apparently Obama is angry at progressives for attacking the Trans-Pacific Partnership.



No: Every critic doesn’t have access. Only a partial version of the deal is available to the public, and only because it was leaked. The very idea that these deals should be done in secret is fundamentally anti-democratic. They do it because they know people would object if they knew what was in them. The Electronic Frontier Foundation has a good summary of what’s wrong, in terms of copyright enforcement.



Go read the rest if you want to be sick to your stomach.

The bill also includes takings tribunals, in which firms would be able to sue governments for violating the terms of the deal. (In the past, such tribunals have been used successfully to sue for such things as banning additives which cause cancer, since the lost sales are a loss for the company involved.)

Obama made his bones by completing the Wall Street bailout. Now, before he finishes his term, he wants to give the people who can make him filthy rich after he’s no longer President a big, fat, slobbery kiss that will make them billions. This may well be, to him, the most important thing he’s done in his entire presidency:


Like all Presidents, even George W Bush, Obama has done both good and evil. But the TPP, from what we know, is almost entirely bad and no one should trust a deal like this that is largely secret. As usual, the TPP is about constraining Democracy, not just internally, but by locking countries in to laws which they then can’t change without abrogating the trade deal.

I covered this in “Free Trade is Elites Betraying Their Own Population“. You should read it.

The notion that one man trading from his parents' house in a working class London suburb had a material role in the 2010 Wall Street flash crash has aroused increasing skepticism from investors and traders since charges were brought on Tuesday.

The U.S. has asked UK authorities to hand over Navinder Singh Sarao, 36, after his arrest this week on charges that he manipulated markets over several years in a fraudulent scheme that helped cause the stock market rout. The U.S. Department of Justice alleges that Sarao used souped-up, off-the-shelf software to trick other market participants into thinking massive sell orders were about to hit, causing the so-called E-mini S&P futures prices to drop so he could buy at cheaper levels. In doing so, he made $40 million in profits, U.S. authorities allege.

But traders doubt that Sarao could have had the upper hand in a market dominated by Wall Street firms with powerful computer trading programs and huge technology budgets.

The charges against Sarao, operating far from the center of U.S. markets and engaging in activity some believe occurs every day among larger firms, show that regulators may not shy away from publicity, even if their case may be legally solid.

Linking Sarao to the flash crash "smacks of sensationalism," said Manoj Narang, founder of Tradeworx, a firm that supplies data for regulators. "Maybe they felt that would get the story in the papers. Mission accomplished, I guess."

In Britain, a petition has been started opposing Sarao's extradition to the United States. So far, at least 194 people have signed up to an online message saying "One man with a single broadband connection cannot bring down an entire market."



Read more: http://www.businessinsider.com/r-flash-crash-charges-garner-increasing-skepticism-in-high-speed-world-2015-4#ixzz3YTBOe5iL

Everyone on Wall Street has been talking about this week's arrest of a little-known UK-based trader on allegations that he caused the May 6, 2010 "Flash Crash." That's because the consensus view on the Street is that the arrest itself is absolutely ridiculous. In fact, as one trader put it, it's "beyond ridiculous." Over the past few days, we've had several conversations with traders, quantitative analysts, and hedge fund managers. It was the topic of conversation at happy hours and charity events. What's more, there wasn't a single person we spoke to who bought the argument that one guy wiped billions from the market in a matter of minutes by "spoofing" — a practice in which a trader orders a bunch of trades and then cancels them. It creates artificial demand and manipulates the price of a stock.

It's been almost five years since the "Flash Crash" and regulators are suddenly blaming Navinder "Nav" Sarao, a 36-year-old who trades S&P futures from his mom and dad's house in a London suburb. Yep, regulators think a guy in saggy sweatpants and Nike Airs trading from his parents' basement did it.

Sarao was arrested and charged with one count of wire fraud, 10 counts of commodities fraud, 10 counts of commodities manipulation, and one count of "spoofing" . If convicted on all counts, Sarao could face up to 380 years in prison based on the maximum sentences for each. Sarao was granted bail ($7.5 million). The US is currently seeking extradition. In the meantime, Sarao has to wear an electronic monitoring tag and follow a curfew. He's also forbidden from using the Internet for any purpose, Reuters reported. His passport is being held by the police.

According to the complaint, Sarao allegedly used an algorithm to manipulate the market for E-Mini S&P 500 futures contracts, or "E-Minis," on the Chicago Mercantile Exchange (CME).

"Sarao’s alleged manipulation earned him significant profits and contributed to a major drop in the U.S. stock market on May 6, 2010, that came to be known as the 'Flash Crash,'" the Department of Justice said in a statement. "On that date, the Dow Jones Industrial Average fell by approximately 600 points in a five-minute span, following a drop in the price of E-Minis."

Eric Hunsader, who runs market analysis firm Nanex LLC, has a great replay of Sarao's trading algo. Along with most of Wall Street, he's skeptical that Sarao could've caused the 'Flash Crash.'

Read more: http://www.businessinsider.com/arrest-of-nav-sarao-is-ridiculous-2015-4#ixzz3YVXgvg3s

http://thesaker.is/ukrainian-analysis-by-the-saker-no-hope-left/

READ IT AND WEEP

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Lots of will there....to find a way!

http://detroit.cbslocal.com/2015/04/27/man-accused-in-ponzi-scheme-sentenced-to-prison/

A 32-year-old man must serve several years in prison and pay $6.5 million in restitution for defrauding investors of millions of dollars in what prosecutors described as a Ponzi scheme.

A Bay County judge sentenced Joel Wilson on Friday to concurrent terms of 105 months to 20 years and five terms of 80 months to 10 years.

The Bay City Times reports he was given credit for 462 days already served. He was convicted in March of all six charges he faced in the securities fraud case.

Wilson was the owner of The Diversified Group Advisory Fund LLC. He was extradited from Germany after being charged in Michigan.

He also was ordered last week to pay $11,000 to the Michigan Attorney General’s Office for the extradition costs.

4/27/15 Is This a Blow-Off Top? Four Ways to Tell
Charles Hugh Smith

Those who lived through the last two speculative blow-off tops know the impossibility of predicting the final top.

How can we tell if stocks are in the final blow-off stage of a bubble? There are four basic give-aways:

1. Parabolic rises in stocks and speculative debt.

2. The mainstream financial media claims the clearly visible bubbles are justified by fundamentals.

3. Conventional financial authorities insist this is not a blow-off top.

4. The expressions of regret of those who sat out the latest rally become ubiquitous.

In the past few days, I have read two laughably baseless justifications of the bubble in Chinese stocks by conventional financial analysts:

A) China is a "black box," i.e. unfathomable, so go with what we know, which is that China is a nation of entrepreneurs: this is the green light to buy the bubble here if you want to reap easy profits.

B) The stock market bubble in China is positive evidence of a healthy re-adjustment of China's financial system.

That neither thesis has the slightest foundation in reality doesn't matter, as the real agenda of the analysts is to justify their own attempts to join the crowd reaping vast profits in the bubble. This denial that a speculative blow-off is clearly occurring is a key indicator that a blow-off top is in its final stages.
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Those who lived through the last two speculative blow-off tops know the impossibility of predicting the final top. Those who bet the top is in (i.e. make short bets that will gain if the market reverses and drops) are often forced to cover when the market advances further, and this panic buying pushes the market even higher.

Only when the ranks of bears willing to bet against the market thin will the short-covering boost dissipate. At that point of bearish exhaustion, the market will roll over when the greater fools (last buyers of the blow-off top) run out of margin buying power.

more...
http://www.oftwominds.com/blogapr15/blow-off4-15.html

Cross post:
http://www.democraticunderground.com/10026574302

http://www.commondreams.org/views/2015/04/27/entitlements-are-bankrupting-america-rich-keep-taking-them