Banks Commence Wholesale, Unsolicited Mortgage-Debt Forgiveness

It was just a matter of time before wholesale debt-forgiveness became the primary source of wealth in the US. The time is now. The NYT reports that "big banks are going to borrowers who are not even in default and cutting their debt or easing the mortgage terms, sometimes with no questions asked. Two of the nation’s biggest lenders, JPMorgan Chase and Bank of America, are quietly modifying loans for tens of thousands of borrowers who have not asked for help but whom the banks deem to be at special risk." To be deemed in "special risk" one needs to simply have an Option ARM mortgage, and be underwater, even if still current on mortgage payments. End result: an up to 50% cut in the actual mortgage obligation. To wit: "Ms. Giosmas, who lives in Miami, was not in default on her $300,000 loan. She did not understand why she would receive this gift — although she wasted no time in taking it. Before Chase shaved $150,000 off her mortgage, Ms. Giosmas owed much more on her place than it was worth. It was a fate she shared with a quarter of all homeowners with mortgages across the nation. Being underwater, as it is called, can prevent these owners from moving and taking new jobs, and places the households at greater risk of foreclosure." Whether this is a strategic step by the banks who wish to avoid tens if not hundreds of billions in fraudclosure and putback related legal costs, charges and reserves is for now unclear, although all signs point to yes. Next up: everyone in America stops paying their mortgage, or demands a 50% haircut on existing debt, now that the example has been made. And in the meantime, banks will somehow continue to keep the mortgages, which they have now cut by up to half, at par on their books following some brand new, thoroughly senseless announcement by the FASB which says banks can mark anything to whatever price they chose in perpetuity. Because otherwise, the TBTF lenders will suddenly find themselves in a massive deficiency on their Tier 1 capital, also known as completely insolvent.

Gold Is Undergoing A Short-Term Correction

posted by Admin at Marc Faber Blog - 50 minutes ago

Gold is undergoing a short-term correction, which is natural during a bull market. The correction could take gold to as low as $1400. This would represent an excellent buying opportunity for investors. To ...

Europe Is Bailing Out The European Banks, Not Greece

posted by Admin at Jim Rogers Blog - 6 hours ago

They are bailing out the european banks, they are not bailing out Greece. - *in Bloomberg * *Jim Rogers is an author, financial commentator and successful international investor. He has been frequently fe...

Eurogroup Approves Fifth Greek Bailout Tranche - Complete Statement And Math Fail

The very critical, and very insufficient 5th bailout tranche to Greece, has now been approved. From Reuters: "Euro zone finance ministers agreed on Saturday to disburse a further 12 billion euros to Greece and said the details of a second aid package for Athens would be finalised by mid-September. After a conference call, the 17 euro zone ministers agreed that the fifth tranche of the 110-billion-euro bailout agreed with Greece in May 2010 would be paid by July 15, as long as the IMF's board signs off on the disbursement. The IMF is expected to meet on July 8 to approve it. The payment will allow Greece to avoid the immediate threat of default, but the country still needs a second rescue package, which is also expected to total around 110 billion euros and which will now likely only be finalised in September. Between now and then, finance ministers will work on the "precise modalities and scale" of the private sector's involvement in the second aid package, which Germany hopes will eventually total around 30 billion euros. Greece said it expected a final decision on a second bailout programme by mid-September to keep the country financed. Eurogroup decided through a teleconference today to work out a new programme on time, before mid-September," Greek Finance Minister Evangelos Venizelos said shortly after the finance ministers approved the 12 billion euro disbursement." More importantly, "The 12 billion euro payment will help Athens cover a 5.9 billion euro bond redemption in August, but the government still has a monumental hill to climb if it is to return to debt sustainability, with its debt-to-GDP ratio above 150 percent."





Save The World?

Posted by: Leo Kolivakis

Post date: 07/02/2011 - 21:44

It was a gorgeous day in Montreal. Hooked up with a buddy of mine who flew into town, a Greek Canadian bear. Our interesting conversation covered blogging, bankers and regulation, BRICs, deflation, oil, the next crisis, Greece and the Greek bailout, ratings agencies, Canada, and lots more. Enjoy!

90 Years of Communist China 

Posted by: EconMatters

Post date: 07/03/2011 - 03:02

The CPC (Communist Party of China) was founded on July 1, 1921 in Shanghai with a large working class support base. Throughout the past 60 years or so, China has never deviate much from socialism. With rapid growth, cracks are starting to surface. 

China’s Communist Party and it’s future

Posted by: thetrader

Post date: 07/03/2011 - 09:14

July 1st marked the 90 years anniversary of the Communist Party of China (CPC). China has undergone huge changes and will be the next super power. If we all end up working for the Chinese or not is to be seen, meanwhile we present some history on the Red Capitalist, that will drive China into the next World Super Power. 

If you haven't seen this yet...Please watch and forward to everyone you know...Take it Viral.

Government Debt and You 

Jim Sinclair’s Commentary

Here is the entire story. I would suggest spreading the truth to offset the lies.