Student Homelessness at a Record High

As banks keep a “shadow inventory” of vacant houses off the market to inflate property values, a look at the cost from CNN Money:

Approximately 1.3 million students enrolled in U.S. public preschools, elementary schools, middle schools and high schools schools were homeless during the 2012-13 school year.

That’s up 8% from the prior year, and the highest number on record, according to the National Center for Homeless Education, funded by the Department of Education.

A lack of affordable housing is a big reason, forcing many families to live in the streets, shelters, motels or to double up with other families, said Jeremy Rosen, director of advocacy at the National Law Center on Homelessness & Poverty.

“This problem continues to get worse because in terms of government programs and support for homelessness, budgets have been cut in recent years, and there’s less affordable housing available,” said Rosen.

Retiring Senator Tom Coburn: Congress Lied To America About Spending

Oklahoma Republican Sen. Tom Coburn said Thursday that Congress lied to the American people about the amount of spending placed in the recent continuing resolution passed by Congress and signed by President Obama last week. In an interview with conservation radio host Laura Ingraham, Coburn said “The reason Americans have such a poor view of Washington is because we’re dishonest with the American public in what we do.” Coburn added that lawmakers from both parties, including Republican House Speaker John Boehner, lied about the amount of spending in the resolution because it far exceeds the amount promised in the two-year federal budget bill passed at the end of 2013.

Watch the video

Banks could face £2bn fine over currency rigging

The world’s biggest banks could face a collective fine of around £2bn over the alleged rigging of global currency markets.

The City regulator, the Financial Conduct Authority, has opened talks with lenders about agreeing a settlement for the manipulation of foreign exchange.

Martin Wheatley, the FCA chief executive, has already said that the rigging of currency markets is as bad as the manipulation of Libor, and the fines facing the banks would be the regulators biggest-ever collection of fines for the same offence.

The FCA scheduled meetings this week with Barclays, HSBC and Royal Bank of Scotland to discuss the outline of a settlement, Sky News reported. Mr Wheatley attended some of the meetings.

The deal could be announced by November, although it is not clear if US regulators will also be involved. Citi, JP Morgan and UBS are also involved in the probe over currency rigging.

Read on.

Wall Street scared new attorney general could be NY U.S Attorney Preet

lol Now, that would be a hoot. I hope Obama puts this man on his short list…

Attorney General Eric Holder is heading to the exit door — and that’s making Wall Street nervous.

Executives in the financial services industry see Manhattan US Attorney Preet Bharara as a possible successor — and with his tough-on-corporate-crime history, believe a renewed focus on Wall Street could be coming to Washington.

Holder, after six years atop the Justice Department, is seen as not interested in highlighting white-collar crimes.

“[Holder] was pretty easy on Wall Street,” Marc LoPresti, a corporate and securities lawyer in New York, told The Post.

“It’s glaring that past financial debacles have led to prosecutions of high-level executives but we have seen almost no prosecution of individuals involved in wrongdoings of financial institutions related to the 2007-2009 financial crisis,” said Anat Admati, a professor of finance at Stanford’s graduate school of business and author of “The Bankers’ New Clothes: What’s Wrong With Banking and What to Do About It.”

Holder announced Thursday that he’ll step down from his position once Congress approves a successor nominated by President Obama.

“It’s probably going to be the Southern District attorney as a direct response to what is the perception of Holder’s lack of aggressive prosecution of financial services executives,” LoPresti added.

Read on.

How Goldman Sachs Controls The New York Fed: 47.5 Hours Of “The Secret Goldman Sachs Tapes”

As ProPublica reported last year, Segarra sued the New York Fed and her bosses, claiming she was retaliated against for refusing to back down from a negative finding about Goldman Sachs. A judge threw out the case this year without ruling on the merits, saying the facts didn’t fit the statute under which she sued.

At the bottom of a document filed in the case, however, her lawyer disclosed a stunning fact: Segarra had made a series of audio recordings while at the New York Fed. Worried about what she was witnessing, Segarra wanted a record in case events were disputed. So she had purchased a tiny recorder at the Spy Store and began capturing what took place at Goldman and with her bosses.

Segarra ultimately recorded about 46 hours of meetings and conversations with her colleagues. Many of these events document key moments leading to her firing. But against the backdrop of the Beim report, they also offer an intimate study of the New York Fed’s culture at a pivotal moment in its effort to become a more forceful financial supervisor. Fed deliberations, confidential by regulation, rarely become public.

The recordings make clear that some of the cultural obstacles Beim outlined in his report persisted almost three years after he handed his report to Dudley. They portray a New York Fed that is at times reluctant to push hard against Goldman and struggling to define its authority while integrating Segarra and a new corps of expert examiners into a reorganized supervisory scheme.

Segarra became a polarizing personality inside the New York Fed — and a problem for her bosses — in part because she was too outspoken and direct about the issues she saw at both Goldman and the Fed. Some colleagues found her abrasive and complained. Her unwillingness to conform set her on a collision course with higher-ups at the New York Fed and, ultimately, led to her undoing.

In a tense, 40-minute meeting recorded the week before she was fired, Segarra’s boss repeatedly tries to persuade her to change her conclusion that Goldman was missing a policy to handle conflicts of interest. Segarra offered to review her evidence with higher-ups and told her boss she would accept being overruled once her findings were submitted. It wasn’t enough.

“Why do you have to say there’s no policy?” her boss said near the end of the grueling session.

“Professionally,” Segarra responded, “I cannot agree.”

The New York Fed disputes Segarra’s claim that she was fired in retaliation.

“The decision to terminate Ms. Segarra’s employment with the New York Fed was based entirely on performance grounds, not because she raised concerns as a member of any examination team about any institution,” it said in a two-page statement responding toan extensive list of questions from ProPublica and This American Life.

The statement also defends the bank’s record as regulator, saying it has taken steps to incorporate Beim’s recommendations and “provides multiple venues and layers of recourse to help ensure that its employees freely express their views and concerns.”

Read on.

And you can listen to the secret recording of Carmen Segarra. Click here.

Update: NPR this morning said they will be playing them in full this weekend. Stay tuned!

US Bank Pays $57M For Missing Identity Theft Services

Law360, New York (September 25, 2014, 3:26 PM ET) — U.S. Bank has been smacked with a $9 million fine and ordered to return $48 million to more than 420,000 customers who were unfairly billed for identity theft protection services they didn’t actually receive, the Consumer Financial Protection Bureau said Thursday.

The fine, which was jointly assessed by the Office of the Comptroller of the Currency, stems from allegations that U.S. Bank signed up customers without their consent for “add-on products” associated with credit cards and other bank products such as mortgage loans and checking accounts,…

Source: Law360

2012 docs shows Alabama federal judge Mark Fuller’s domestic abuse repeat offender: Abuse first wife and children

As I posted a few weeks ago, Alabama judge Mark Fuller was arrested for beating his wife (his second wife). Here are 2012 docs of domestic abuse case of his second wife that is more damning. Certainly, this judge must be removed from the bench as he is trying to get his current case expunged. Here is the story of Fuller’s first wife:

Brad Blog:

According to the Reporters Committee for Freedom of the Press in 2012, the first wife, Lisa Boyd Fuller, “submitted an objection to her husband’s motion to seal their divorce file…She agreed to redact certain sensitive information but ‘strenuously object[ed] to sealing the entire file,’ according to her response. Her initial complaintand request for admissions accuse Fuller of extramarital affairs, domestic violence and prescription drug abuse.”

Despite the objections from his first wife, the court agreed to seal the record at the time, which is unusual, according to legal expert Scott Horton of Harper’s, who wrote: “It’s an obviously improper decision, particularly because Mrs. Fuller rejected to the sealing of the file. For the file to be sealed, over the objection of one party, is unusual.”

While the claims contained in Lisa Fuller’s April 20, 2012 Request for Admissions are only allegations, we are not able to see how Judge Fuller responded to them, thanks to that portion of the record becoming sealed. However, in 2012, Alabama journalist Roger Shuler was able to obtain and publish Mrs. Fuller’s Request for Admissions and it is damning, disturbing, and apparently completely ignored by the Atlanta prosecutors and court which both appear ready to let Judge Fuller off the hook with far less than a slap on the wrist.

The document contains disturbing references to alcohol and prescription drug abuse and sexual impropriety, as well as physical abuse of both the first Mrs. Fuller and their children.

Here are the bullet points from that document [emphasis added], since these earlier allegations have, to date, been seemingly ignored by both authorities in Atlanta who are letting him off the hook, and elected officials who seems as if they’ll be happy with his little more than his resignation…

 

To add a bonus to this story. Here are court filings. Hat tip to Legal Schnauzer blogsite:

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5 U.S. Banks Each Have More Than 40 Trillion Dollars In Exposure To Derivatives

Submitted by Michael Snyder of The Economic Collapse blog,

The “too big to fail” banks run up enormous profits from their derivatives trading.  According to the New York Times, U.S. banks “have nearly $280 trillion of derivatives on their books” even though the financial crisis of 2008 demonstrated how dangerous they could be…

American banks have nearly $280 trillion of derivatives on their books, and they earn some of their biggest profits from trading in them. But the 2008 crisis revealed how flaws in the market had allowed for dangerous buildups of risk at large Wall Street firms and worsened the run on the banking system.

The big banks have sophisticated computer models which are supposed to keep the system stable and help them manage these risks.

But all computer models are based on assumptions.

And all of those assumptions were originally made by flesh and blood people.

When a “black swan event” comes along such as a war, a major pandemic, an apocalyptic natural disaster or a collapse of a very large financial institution, these models can often break down very rapidly.

For example, the following is a brief excerpt from a Forbes article that describes what happened to the derivatives market when Lehman Brothers collapsed back in 2008…

Fast forward to the financial meltdown of 2008 and what do we see? America again was celebrating. The economy was booming. Everyone seemed to be getting wealthier, even though the warning signs were everywhere: too much borrowing, foolish investments, greedy banks, regulators asleep at the wheel, politicians eager to promote home-ownership for those who couldn’t afford it, and distinguished analysts openly predicting this could only end badly. And then, when Lehman Bros fell, the financial system froze and world economy almost collapsed. Why?

The root cause wasn’t just the reckless lending and the excessive risk taking. The problem at the core was a lack of transparency. After Lehman’s collapse, no one could understand any particular bank’s risks from derivative trading and so no bank wanted to lend to or trade with any other bank. Because all the big banks’ had been involved to an unknown degree in risky derivative trading, no one could tell whether any particular financial institution might suddenly implode.

After the last financial crisis, we were promised that this would be fixed.

But instead the problem has become much larger.

When the housing bubble burst back in 2007, the total notional value of derivatives contracts around the world had risen to about 500 trillion dollars.

According to the Bank for International Settlements, today the total notional value of derivatives contracts around the world has ballooned to a staggering 710 trillion dollars ($710,000,000,000,000).

And of course the heart of this derivatives bubble can be found on Wall Street.

What I am about to share with you is very troubling information.

I have shared similar numbers in the past, but for this article I went and got the very latest numbers from the OCC’s most recent quarterly report.  As I mentioned above, there are now five “too big to fail” banks that each have more than 40 trillion dollars in exposure to derivatives…

JPMorgan Chase

Total Assets: $2,476,986,000,000 (about 2.5 trillion dollars)

Total Exposure To Derivatives: $67,951,190,000,000 (more than 67 trillion dollars)

Citibank

Total Assets: $1,894,736,000,000 (almost 1.9 trillion dollars)

Total Exposure To Derivatives: $59,944,502,000,000 (nearly 60 trillion dollars)

Goldman Sachs

Total Assets: $915,705,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $54,564,516,000,000 (more than 54 trillion dollars)

Bank Of America

Total Assets: $2,152,533,000,000 (a bit more than 2.1 trillion dollars)

Total Exposure To Derivatives: $54,457,605,000,000 (more than 54 trillion dollars)

Morgan Stanley

Total Assets: $831,381,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $44,946,153,000,000 (more than 44 trillion dollars)

Montgomery County takes mortgage fight to banks

After winning a June 30, 2014 decision against the company that maintains a national

registry of mortgage transactions, the Montgomery County Record of Deeds has filed a class action suit at the U.S. District Court for the Eastern District of Pennsylvania against the banks who allegedly bought and sold mortgages without paying the real estate recording fees.

In June, U.S. District Judge J. Curtis Joyner allowed Montgomery County Recorder of Deeds Nancy Becker to continue with her class action suit against Merscorps, the multi-billion dollar business that owns and maintains the MERS electronic database, which records mortgage transactions made between investors and trusts. Becker claimed that the database did not record thousands of transactions, denying Montgomery County more than $15 million in fees.

The civil trial has not yet begun, but in the meantime Becker has now gone after the banks that used the MERS system to avoid paying for each transaction of Montgomery County mortgages.

In court papers filed on Sept. 24, Becker claims that defendants The Bank of New York Mellon, Citibank, Deutsche Bank, JPMorgan, Wells Fargo and HSBC participated in the securities trading industry without properly recording each time a mortgage changed hands, actions that not only kept funds out of the county but left homeowners confused about which bank owned their loans.

“These failures to record mortgage assignments have damaged the integrity of Pennsylvania’s public land records by creating gaps in the chain of title and creating confusion among property owners,” the complaint says.

Read on.