Foreclosure Expert Confirms Mortgages Pledged Multiple Times, Not Actually Securitized, Document Problem Is Really a System of "Push-Button Fraud"

 

The $1,387,796,500,000 Off-Balance Sheet Securitized Real Estate Loan Question

 

In The News Today

Posted: Oct 19 2010     By: Jim Sinclair      Post Edited: October 19, 2010 at 11:05 pm
Filed under: In The News

Jim Sinclair’s Commentary
Eric King of King World News was kind enough to interview me on today’s events. Click here to listen to the interview…



Jim Sinclair – Brief Period of Victory for Bubble Callers:
With the move down in the gold market today, King World News interviewed the legendary Jim Sinclair to get his thoughts on where things stand.  Many investors are badly shaken by a day like today, but Jim and I spent large chunks of our conversation laughing today as we swapped market war stories.  Here is what was left that was suitable for print from that interview…
We had a big drop in sentiment in gold today.  What’s funny Jim is that the sentiment today is the same as it was $400 or $500 dollars ago.  You have investors and traders in gold that are still very afraid, and at the slightest hiccup in the market their fear escalates.  Because of that would you say we have a little more work to do on the downside in gold?
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Jim Sinclair’s Commentary
I am telling you that this is the second phase of the OTC disaster – the deepest and most devastating of the entire experience.
Today’s action in gold will be seen shortly to be a flush of what was bought by the principles of the major international investment firms by the tonne.
$1650 is coming quite soon.

Some Sand in the Gears of Securitizing By FLOYD NORRIS
Published: October 18, 2010
Was the great securitization machine that made hundreds of billions of dollars in mortgage loans based on a legal foundation of sand?
That possibility, raised by two law school professors, has begun to scare many jittery investors, causing bank stocks to plummet, although they recovered a little Monday.
If they are correct, the best outcome for lenders would be a prolonged delay in completing foreclosures, raising costs still further and paralyzing an already depressed housing market.
The worst outcome would be a conclusion that errors by financial institutions had decoupled the payment promises made by borrowers from the mortgages they signed. In that case, the mortgages would be invalid. Homes could be sold without paying off lenders. There also could be heavy tax consequences for lenders, both in terms of federal income taxes and in payment of back fees for mortgage registrations to local governments across the country.
The arguments involve MERS, the Mortgage Electronic Registration Systems, which was created to smooth the securitization process and, in the process, to allow lenders to avoid paying registration fees to counties each time the mortgage changed hands.
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Jim Sinclair’s Commentary
Here is an accurate video of the top and bubble caller’s success in the gold market.



Jim Sinclair’s Commentary
It is much more than simple reputation risk that the FASB has due to their politically motivated capitulation allowing financial institutions to make up their own value for defunct paper.
Look at the Banksters go wild as FASB seeks to redeem itself. I have a feeling FASB is going to put up a fight this time rather than rolling over like they did in April of 2009.

New KBW and Greenwich Associates Study Finds U.S. Institutional Investors Strongly Oppose FASB Proposal on Fair Value for Bank Loans
Oct. 19, 2010, 10:00 a.m. EDT
NEW YORK, Oct 19, 2010 (BUSINESS WIRE) — More than two-thirds of large U.S. institutional investors oppose a proposal by the Financial Accounting Standards Board (FASB) that would mandate fair value accounting treatment for most bank loans, according to a study released today by Keefe, Bruyette & Woods (KBW) and Greenwich Associates.
The study was commissioned to gain insights into large institutional investors’ understanding of and support for a series of recent FASB bank accounting proposals. Among the key changes proposed is an expansion of fair value accounting rules that would require banks to report the value of most loans on their books at estimated fair value alongside the current cost accounting valuations.
According to the study, 66% of institutional investors say they are either strongly or very opposed to the proposal. Only one in five (20%) are in favor of the FASB’s recommended changes. Despite the clear opposition, many of the institutional investors surveyed concede that current accounting standards are inadequate and need to be revised.
"The FASB’s mission is to provide useful information to investors, and the current proposal to expand fair value reporting on bank balance sheets is intended to improve the quality of information available to investors," said Thomas Michaud, President of Keefe, Bruyette & Woods. "However, the results of this study demonstrate that a large majority of U.S. institutional investors think FASB is taking the wrong approach."
Institutions’ primary objections to fair value accounting appear two-fold. First, they believe mark-to-market valuations would not be helpful in making investment decisions because fair market values for loans held on banks’ books and other infrequently traded financial instruments would not be reliable. In fact, up to 45% say the expansion of mark-to-market rules for bank loans would cause them to reduce their level of investment in U.S. banks. Second, they fear that variations in reported fair market values will magnify cyclicality in bank earnings and the economy as a whole.
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Jim Sinclair’s Commentary
This article says the securitized debt OTC derivative market is seizing up. It is not seizing up, it is dying.
This mountain is a two trillion dollar scam. It was known in 2008, but nothing was done about it.
Now litigation is going to set the victims free.
What the first OTC derivative crisis did not do to the international investment banks, litigation will. Here comes the final act in the OTC derivative crime against humanity.

The Securitization Market Is Seizing Up Published: Tuesday, 19 Oct 2010 | 4:05 PM ET
By: Lori Ann LaRocco
CNBC Sr. Talent Producer
After my interview with Andy Sandler of Buckley Sandler, who said he is seeing a freezing of the credit markets because of the foreclosure fiasco and put-back tsunami, I decided to call on one of the well known banking experts in the market—David Ellison, Portfolio Manager of the five star FBR Small Cap Financial Fund.
So have the wheels of the credit market come off the rails?
David Ellison: What I’m hearing the bigger companies are looking at the processes now. They are not being aggressive in issuing new mortgages. They want to make sure they get the process right. All the securitizations are getting bogged down. This is not an issue of banks not wanting to lend. They want to make sure on the front end they have all the appropriate information on the back end ready. The smaller companies are in better position because they are not directly securitizing loans. And when they sell a loan, they don’t own it. Its a simpler process.
You bring up an important issue and what I’m more concerned is what’s going on the very front end which you bring up. If I go in for a mortgage now, will it been bogged down because they are so backed up with the other stuff or because the banks will have to additional stuff and will delay it?
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Jim Sinclair’s Commentary
This is an excellent article on the fake dollar rally to .8900, and the real and agonizing future of the lower dollar.
Those that sold gold today based on a dollar rally are fools being foolish. TA this time around will bury the many. Algorithms are the nail in that coffin.
 
The strength of the euro is no accident By Axel Merk
Published: October 19 2010 15:43 | Last updated: October 19 2010 15:43
Earlier this year, the euro was sold as a proxy for a variety of ailments in the eurozone. However, as we argued then and now, the euro will not only prevail, but triumph over the US dollar in the medium to long-term.
Let’s first debunk the myth that economic growth is necessary to have a strong currency – just look at Japan.
To understand why the euro may continue to strengthen, consider the yen: how has Japan, with its dismal economic growth had such a strong currency? Unlike the US, which requires foreigners to finance its current account deficit, Japan has a trade surplus while financing its budget deficit domestically. Indeed, the yen has experienced great strength since 2007, a period where Japan went through eight finance ministers, a reflection of weak governments unable to spend money or exert pressure on the Bank of Japan to print money. The US dollar, in contrast, is highly sensitive to perception changes about economic growth, as foreigners are more inclined to invest in the US when growth is anticipated. The eurozone’s current account is roughly in balance; as a result, lacklustre growth and a strong euro are quite compatible.
In our assessment, European Central Bank monetary policy is more robust than that of the Federal Reserve. The ECB’s model of providing unlimited liquidity to the banking sector can be phased out within a year for the longest such facility. In contrast, the Fed has been buying mortgage-backed securities and bonds to stimulate the economy. Huge challenges are inherent to such a strategy, one being that the Fed has lost control of its balance sheet: the low interest rates encourage consumers to refinance their mortgages, in the process paying back the loans underlying the MBS held by the Fed, thus increasing the levels of pre-payment risk and volatility of the Fed’s underlying assets. Moreover, the Fed’s balance sheet is much less flexible than the ECB’s. With so much of the Fed’s assets tied up in longer-term MBS, which has little to no functioning market, the Fed’s ability to implement effective monetary policy may be severely compromised.
It’s often been lamented that the eurozone has no central finance minister to co-ordinate a fiscal response in a crisis. It’s true that the eurozone sorely needs improvements to existing communication channels, although great strides have been made with Olli Rehn, EU commissioner for monetary affairs, who has given his office the profile it deserves and requires. Rarely observed, however, is the major advantage of not having a central Treasury secretary: it is far more difficult to spend money. In the US, it’s comparatively easy to stuff a trillion dollars into the banking system; in the eurozone, the money has to come from regional, often local, governments which is a far more painful process.
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Jim Sinclair’s Commentary
The biggest news today is buried. It is not the .25 basis point rise in China rates. It is China embargoing the US on strategic material.
The Strategic Material War I wrote about in 1983 has been declared today. The United States’ strategic metals and materials stockpile is a joke. It is made up of old science, the wrong things, and is most likely packed and stored incorrectly, therein leading to its downgrade over time.
These items are key ingredients in all advanced weapons systems and high tech devices.
China did the same to Japan over a disagreement. In one day Japan folded.
I imagine there is no one in Washington that even knows what a rare earth item is. They are probably wondering why China would embargo worthless dirt.

New York Courts To Require Plaintiff Counsel To Verify Accuracy Of Foreclosure Docs

 

Merkel Attempt To Talk Down Euro Rejected By MGA Rumor That Fed Will Announce Aggressive Bond Buying Any Minute