Daily Archives: December 27, 2012

Plea for help from Chinese labor camp worker paid $1.61 per MONTH found stuffed in Oregon woman’s Halloween decorations from Kmart

Oregon mother Julie Keith expected to find Styrofoam headstones in the graveyard kit she bought at Kmart for Halloween.

What she didn’t expect was a desperate plea for help from one of the Chinese laborers forced to make the holiday decorations in brutal conditions.

The 42-year-old charity worker from Portland discovered the chilling letter hidden between the two novelty headstones when she opened the kit in October.

‘Sir: If you occasionally buy this product, please kindly resend this letter to the World Human Right Organization,’ the unsigned note, that was folded into eighths, read.

‘Thousands people here who are under the persicution [sic] of the Chinese Communist Party Government will thank and remember you forever.’

The letter’s author said the Halloween product was made in Masanjia Labor Camp in Shenyang, China, where laborers are forced to work for 15 hours a day without time off on the weekends and holidays.

‘Otherwise, they will suffer torturement, beat and rude remark. [sic] Nearly no payment,’ they wrote in choppy English accompanied by Chinese characters.

The plea said workers at the labor camp make only 10 yuan per month – the equivalent to $1.61.

The China director at Human Rights Watch, Sophie Richardson, told The Oregonian that the origin or authenticity of the letter couldn’t be confirmed.

Read more: http://www.dailymail.co.uk/news/article-2253572/Julie-Keith-letter-Plea-help-Chinese-labor-camp-worker-stuffed-Oregon-womans-Halloween-decorations.html#ixzz2GGGMcBAx
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“Spanish Lender Bankia Will Wipe Out 350,000 Shareholders”

(Reuters) – Spanish lender Bankia will wipe out 350,000 shareholders, many of them small savers with little knowledge of financial markets, after it emerged it had a negative value of 4.2 billion euros (3.46 billion pounds).

The measure, which will hit shareholders who were encouraged by aggressive marketing tactics to invest in the company, is seen as vital if the nationalised bank is to be refloated.

A source close to the Bank of Spain said Bankia would receive 18 billion euros of European money by Friday and launch a capital increase in the first half of January when current shareholders will lose practically their entire investment.

Under the European Union plan to prop up Spain’s banking sector, shareholders must be the first in the queue to suffer losses. This has already been the case in Ireland where shareholders in Anglo Irish Bank were left with nothing.

Read on.

Fake filings aim to stall valley foreclosures, prosecutors say

STANISLAUS COUNTY — Authorities’ patience with people facing foreclosure — normally a sympathetic bunch, especially in the Central Valley where rates are sky high — wears thin when owners might be using illegal means to keep their homes.

Fraud investigators say they are seeing an emerging foreclosure rescue scheme in which desperate homeowners record phony documents — a felony — simply to stall losing property at public auction.

The cost of buying time can be steep: The homeowner typically pays a bundle of money for bogus forms and learning how to use them, often loses the property anyway and then faces criminal charges.

CFPB: Bank of America Nets Most Mortgage Complaints by Sizable Margin

JP Morgan came in third.

Between July 21, 2011 and September 30, 2012, U.S. consumers filed 36,403 mortgage-related complaints against various lenders, banks, servicers, and other mortgage companies, according to a data collected by the Consumer Financial Protection Bureau (CFPB).

Bank of America accounted for 27% of complaints, the most out of any bank accounted for in CFPB’s data.

Of the 9,930 mortgage complaints filed against Bank of America, 6,430 related to loan modifications, collections and foreclosures. Loan servicing, payments and escrow accounts recorded 2,044 complaints, while complaints regarding application, originator or mortgage broker issues tallied 542.

Bank of America received nearly twice as many complaints as No. 2-ranked Wells Fargo, the nation’s largest mortgage lender, who recorded 5,051 mortgage-related complaints in the CFPB study’s time frame.

Read on./

Mortgage Lender Aurora Loan Services Failed to Honor Agreements

OAKLAND (CN) – Mortgage lender Aurora Loan Services failed to honor its promise not to foreclose on homeowners who had opted into a program they believed would help them keep their homes.
Mauder and Alice Chao, Deogenoso and Glorina Palugod, and Maritza Pinel were all in danger of foreclosure when Aurora offered them “workout agreements” that gave them the opportunity to cure their defaults while adhering to a monthly payment plan. In a class action filed in November 2011, the five homeowners claimed Aurora misled them into believing that they could avoid foreclosure and eventually obtain loan modifications if they complied with the agreement, all the while Aurora continued to collect payments from them and still planned to foreclose.
U.S. District Judge Saundra Brown Armstrong denied Aurora’s motion for judgment, rejecting its argument that the class’ claims were preempted by the Home Owners’ Loan Act.

Read on.

9th Circuit Lifts Fees Injunction on Wells Fargo

(CN) – The 9th Circuit on Wednesday lifted an injunction against Wells Fargo’s use of the “high-to-low” method of posting customers’ debit card purchases, which a California class action claims brings billions of dollars in fees to the bank at the expense of regular customers.
Finding that federal banking laws supersede the state unfair business practices statute under which the class sued, the federal appeals court in San Francisco unanimously vacated a lower court’s injunction and let Wells Fargo off the hook for $203 million in restitution.
After paying hundreds of dollars in fees on relatively small overdrafts, lead plaintiffs Veronica Gutierrez and Erin Walker sued the bank to get their money back and stop the “high-to-low” practice, which Wells Fargo started in California more than a decade ago.

Read on.

The seven largest banks have 14,500 subsidiaries between them

American Banker:

The biggest banks submitted their first living wills this summer. William Dudley, the president of the Federal Reserve Bank of New York, recently conceded that the banks’ living wills “confirmed that we are a long way from the desired situation in which large complex firms could be allowed to go bankrupt without major disruptions to the financial system and large costs to society. Significant changes in structure and organization will ultimately be required for this to happen.” The “initial exercise,” Dudley said, provided regulators a “better understanding of the impediments to an orderly bankruptcy,” and was the beginning of an “iterative process.”

Simon Johnson, former chief economist for the International Monetary Fund, concluded from Dudley’s remarks that the living wills process was “a sham, meaningless boilerplate and box checking.” Maybe Johnson is too harsh, but “ultimately” is a very indulgent deadline in the new “age of the bank run.” The uncertainties in the financial system may not allow for year after year of polite suggestions by regulators and modest tweaks by institutions.

Dudley said that the “current approach” of regulators is to reduce the likelihood that the biggest institutions might fail by requiring frequent stress tests, increased capital and liquidity buffers, and reforms to shadow banking and derivatives markets. “The bad news is that some of these efforts are just in their nascent stages,” Dudley said.

The “blunter approach” of breaking up the biggest banks “may yet prove necessary,” Dudley said, but it is “premature to give up on the current approach.”

The “negative externalities” of the last crisis, to use Dudley’s phrase, were widespread, long-term unemployment and underemployment; declining wages; the loss of decades of wealth accumulation by most families; and frightening rage that may be incompatible with enduring, stable democracy. A trial and error approach to regulation really should not be an option.

Megabanks have many incentives to remain too big to fail. They apparently enjoy immunity from criminal prosecution, even for “epic” rigging of the world’s benchmark interest rates to defraud counterparties to interest rate derivatives, and for money laundering for terrorists, genocidal regimes and drug cartels. The “implicit government guarantee” provides almost unlimited liquidity for every line of business and allows megabanks to borrow more cheaply than smaller competitors. Megabanks will not voluntarily become small enough or simple enough to fail.

In fact, the most obvious impediments to orderly resolution appear intentional. The seven largest banks have 14,500 subsidiaries between them, but each megabank operates as a single enterprise with consolidated management and a common pool of capital and liquidity. As a result, every subsidiary is responsible for the liabilities of the parent corporation and all of the siblings. An obvious starting point for regulators is to require that the riskiest lines of business be conducted in separately managed, separately capitalized subsidiaries. A stand-alone subsidiary could fail without a collapse of the entire enterprise, and if the enterprise became insolvent, many subsidiaries could still operate relatively normally. Stand-alone subsidiaries would be easier to sell or spin off without serious disruption, even if the megabank is at the point of death.


And which are the seven large banks?

1 JPMorgan Chase & Company

2 Bank of America Corporation

3 Citigroup Incorporated

4 Wells Fargo & Company

5 Goldman Sachs Group, Incorporated

6 MetLife, Inc.

7 Morgan Stanley