Banks: We’re breaking the law, OK?

60 Minutes (2/15/09)

How did the mortgage industry destroy itself and set off an economic collapse that ruined the finances of millions of Americans? Executives tend to hold themselves blameless, saying that no one could have seen the disaster coming.

Well, judge for yourself after you hear the story of Paul Bishop, who worked at the nation’s second largest savings and loan. World Savings Bank was among the industry’s most admired mortgage lenders. But Bishop says the kind of lending practices he saw were leading to a world of trouble that would ultimately result in billions in losses and a federal investigation.

What does Paul Bishop say he told executives at World Savings, three years before the crash?

“We’re breaking the law, okay? We’re breaking the law. You know we’re breaking the law. I know we’re breaking the law. What the hell do you think is going on here? You know, you’re granting too many people loans who simply can’t qualify,” Bishop told 60 Minutes correspondent Scott Pelley.

Bishop’s story is a rare inside look at forces that tore the economy apart, as seen by a plain-spoken loan salesman who is now suing World Savings, claiming that he was fired for telling executives what they didn’t want to hear.

“I definitely talked to him about Enron. I said, ‘We’re sitting on an Enron.’ This is…bigger than Enron. I mean, we’re doing four billion a month in loans. If housing drops, housing value drops, people start to default, you know? This is a nightmare. These people will not survive it,” Bishop told Pelley.

Bishop was a mortgage salesman at World Savings San Francisco Loan Origination Center. He’d been a top salesman at IBM and spent years as a stock broker. Most everywhere he went, he had a reputation for speaking his mind and ruffling feathers. He joined World in 2002, in part, because of its history.

Bishop says the owners were Herb and Marion Sandler.

“And their reputation at the time was what?” Pelley asked.

“It was flawless, near as I could tell,” Bishop said.

In fact, Herb and Marion Sandler were legendary. In 1963, they started Golden West Financial and grew to 285 branches under the name World Savings. The Sandlers’ were known for careful, conservative lending. They’ve given away millions of dollars to charity and started an advocacy group for low income borrowers called the Center for Responsible Lending.

In 2006, just before the housing crash, the Sandlers sold their bank to Wachovia and pocketed $2.3 billion.

Trouble is, some of their money came from people like Betty Townes, who is financially ruined after being sold a series of World Savings mortgages she couldn’t afford.

Asked how many times she refinanced, Townes said, “Well we refinanced practically every year.”

World salesmen convinced Betty to refinance her mortgage four times in four years. She got about $20,000 each time. “Well, all I know that they told me this loan was best for me,” she told Pelley.

But how could it be best when Betty’s pension couldn’t qualify her for the loans?

“They told me that they would go by my husband’s payroll,” she said.

“Even though he’d been laid off from the shipyard?” Pelley asked.

“No, he’d passed away,” Townes replied.

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Banks buy politicians — on sale, now!

Bill Moyers on PBS, February 13, 2009

On Tuesday, February 10, 2009 Treasury Secretary Timothy Geithner unveiled the Obama administration’s plan to address the crisis in the financial sector. The strategy he outlined calls for the largest Federal intervention in banks and finance since the Great Depression, flooding as much as $2.5 trillion into the system. Given its size and scope — the bill’s lack of detail drew a widely negative response from analysts and economists.

Although he thinks the details are important, Simon Johnson, Professor of Economics at MIT, worries more that Geithner and the Obama administration won’t address a big underlying problem and be tough enough on the politically powerful banking lobby.

 

Too Big To Fail?

Johnson explains to Bill Moyers on the JOURNAL that the U.S. financial system reminds him more of the embattled emerging markets he encountered in his time with the International Monetary Fund than that of a developed nation. As such, Johnson believes that the U.S. financial system needs a “reboot,” breaking up the biggest banks, in some cases firing management and wiping out shareholder value. Johnson tells Bill Moyers that such a move wouldn’t be popular with the powerful banking lobby: “I think it’s quite straightforward, in technical or economic terms. At the same time I recognize it’s very hard politically.”Without drastic action, Johnson argues, taxpayers are merely subsidizing a wealthy powerful industry without forcing necessary systemic changes: “Taxpayer money is ensuring their bonuses. We’re making sure that banks survive. And eventually, of course, the economy will turn around. Things will get better. The banks will be worth a lot of money. And they will cash out. And we will be paying higher taxes, we and our children, will be paying higher taxes so those people could have those bonuses. That’s not fair. It’s not acceptable. It’s not even good economics.”


Evil bastards

The GM genocide: Thousands of Indian farmers are committing suicide after using genetically modified crops

By Andrew Malone
Last updated at 12:48 AM on 03rd November 2008

When Prince Charles claimed thousands of Indian farmers were killing themselves after using GM crops, he was branded a scaremonger. In fact, as this chilling dispatch reveals, it’s even WORSE than he feared.

The children were inconsolable. Mute with shock and fighting back tears, they huddled beside their mother as friends and neighbours prepared their father’s body for cremation on a blazing bonfire built on the cracked, barren fields near their home.

As flames consumed the corpse, Ganjanan, 12, and Kalpana, 14, faced a grim future. While Shankara Mandaukar had hoped his son and daughter would have a better life under India’s economic boom, they now face working as slave labour for a few pence a day. Landless and homeless, they will be the lowest of the low.

India’s Debt-Ridden Farmers Committing Suicide

By Jason Motlagh

Nashik, India — On a recent afternoon, Seetabai Atthre heard a faint cry from the edge of a vineyard that her family has cultivated for more than 40 years. Through the furrows, she found her husband, Vishal, smoldering on the ground next to an empty can of kerosene. He had lit himself on fire and died three days later in a local hospital.0323 02 1

Atthre attributes her husband’s suicide to a $5,600 debt. The farm located on the arid plains of northern Maharashtra state near the town of Nashik had not turned a profit in more than two years, and 65-year-old Vishal could no longer secure a bank loan to pay off interest on the debt.”This is wrong, and it’s killing us,” Sanjay Gangode said at a gathering of debt-ridden grape farmers in the region. “There is no future here.”

While India’s economy surges forward on the crest of globalization, thousands of farmers are taking their own lives every year to escape mounting debt and an uncertain future. According to the National Crime Records Bureau, at least 87,567 farmers committed suicide between 2002 and 2006. In Maharashtra state, there were 4,453 suicides in 2006, the last year for which statistics were made available, an increase of 527 compared with 2005. Sharp increases have also been reported in Andhra Pradesh and Chhattisgarh states.

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Do you know what is in your food?
Is it genetically engineered?

Frequently Asked Questions

Question: Why don’t the food manufacturers and the biotech companies want you to know if your foods have been genetically engineered?

Answer: Because if they are labeled, you will start asking questions such as “Have these genetically engineered foods been safety tested on humans?” The answer to that question is NO!


Question: Doesn’t the U.S. Food and Drug Administration (FDA) require genetically engineered foods to be safety tested like they do for new drugs and food additives before they are sold to the public for consumption?

Answer: NO! With limited exceptions, under current FDA regulations, companies are not even required to notify the agency they are bringing new genetically engineered products to the market.


Question: How much of the food I buy in the grocery stores contain genetically engineered ingredients?

Answer: Since genetically engineered soy and corn are used in many processed foods, it is estimated that over 70 percent of the foods in grocery stores in the U.S. and Canada contain genetically engineered ingredients.


Question: Are people all over the world eating genetically engineered foods?

Answer: No, all of the European Union nations, Japan, China, Australia, New Zealand and many other countries require the mandatory labeling of foods that contain genetically engineered ingredients. As a result, food manufacturers in all those countries choose to use non-genetically engineered ingredients.

The Campaign

Bank on America

Bank on this.

Bank on this.

 

Community-based movements to halt the flood of foreclosures have been building across the country. They turned out in Cleveland once again in October, when a coalition of grassroots housing groups rallied outside the Cuyahoga County courthouse, calling for a foreclosure freeze and constructing a mock graveyard of Styrofoam headstones bearing the names of local communities decimated by the housing crisis. (They did not, unfortunately, stop the more than 1,000 foreclosure filings in the county the following month.) In Boston the Neighborhood Assistance Corporation of America began protesting in front of Countrywide Financial offices in October 2007. Within weeks, Countrywide had agreed to work with the group to renegotiate loans. In Philadelphia ACORN and other community organizations helped to pressure the city council to order the county sheriff to halt foreclosure auctions this past March. Philadelphia has since implemented a program mandating “conciliation conferences” between defaulting homeowners and lenders. ACORN organizers say the program has a 78 percent success rate at keeping people in their homes. One activist group in Miami has taken a more direct approach to the crisis, housing homeless families in abandoned bank-owned homes without waiting for government permission.

It’s unlikely, though, that any of these activists will be able to relax soon. 

The Nation

 

When I was a lad, I ran off to San Francisco, like hippies from all over, to be free and unconventional and rid of the whole corporate America trip.

I ended up working at the Bank of America, thanks to a pink collar stoner chick who fudged my typing test.

While working at their headquarters, I learned about the proud heritage of the bank, which had rebuilt San Francisco in the early 20th century, in the wake of its great earthquake. 

Today, of course, bankers are universally regarded as monuments to heroic greed, spectacular corruption and epic incompetence–one short step above child molesters on the social scale. Adrift in their bubbles, intoxicated by their own emissions, only they remain unaware of this downward turn in public perception.

When a reporter for the AP politely asked them what they were doing with billions of dollars of the taxpayers’ bailout ransom, they sniffily replied to this effect: “Listen, you tawdry little man–we don’t give a fig about you and your shabby readers. We have parties to attend. Kindly pay up and shut up. Then find your way out.”

Men have short memories. It wasn’t so long ago in the long view of history that, faced with a similar situation, the rabble roused themselves in the streets of Paris and handed the nobility their heads. Good times.

Today, gun shops can’t keep up with demand.

Being a peaceful sort and averse to noise, I got to thinking that maybe it doesn’t have to come to bloodshed and armed insurrection.

Is it conceivable that bankers today are capable, if only in theory, of once again doing the right thing? Could they ever, even in an imagined world, earn their fat paychecks and lead us out of the mess that is largely their own creation? 

Trying to wrap my head around that wild notion, I am once again transported back to a more innocent era.

All across the nation

Such a strange vibration …

 

 

 


Stop, you’re killing me

Letter to a friend:

As you have rightly intuited, the inflammatory politics is merely symptomatic of a larger crisis — the end of the time we know and the beginning of another — as presaged by war, famine, fire, flood and reality TV.

This just in:

NATIONAL (NBC ) – Does the financial crisis have you feeling stressed out? Well, you’re not alone.

A newly released survey by the American Psychological Association shows the declining economy is causing stress levels to skyrocket.

The annual report takes a look at the stress level of Americans, and this year, stress is on the rise.

As things get worse on Wall Street, it seems Americans are hitting the wall. They’re stressed out and letting it show.

Dr. Katherine Nordal, the Executive Director for Professional Practice, says they have “irritability, depression, sleeplessness, problems concentrating…”

A new survey by the American Psychological Association finds eight out of ten Americans say the economy is now a significant source of stress.

Almost half say their stress has increased in the past year and they are now increasingly worried about their ability to provide even their families basic needs.

Dr. Nordal says, “What we’re seeing is more and more people coming in because they are more stressed about financial situations, having homes foreclosed on.”

According to the survey, women are being hit the hardest, feeling more stress than men about money, the economy, job stability, housing costs and health problems.

Since I’m the canary in the coal mine when it comes to stress, I can tell you with an uncertain amount of authority that exercise, rest, vitamins, meditation, prayer, soothing music and talking things over with trusted friends are all terrific for smoothing you out. Humor, where appropriate, can also work wonders.

That said, the sheer numbers of wobbling blobs of bobbling blubber among us — I speak, of course, of our fellow Americans — tell us that not everyone “gets” this. We therefore have a lot on our plate. Not as much as them, but you see my point.

The foregoing does not cover all those who resort to drugs and alcohol, of course, who can be counted upon to spiral out into all sorts of lunacy, not all of them comical.

You can, again, mightily empower yourself, being such a good ear and wise counsel, by helping others at this time of crisis, always bearing in mind the final temptation.

Now is my way clear, now is the meaning plain:
Temptation shall not come in this kind again.
The last temptation is the greatest treason
To do the right deed for the wrong reason.

My love to you and the gang!

Our transcendent splendor,

Brian J. Flanagan

Fossil Men Refuse to Go Quietly

A polar bear swims recently in open water off the coast of Alaska. The shrinking sea ice increases the pressure on polar bears, who usually hunt on the ice.

A polar bear swims recently in open water off the coast of Alaska. The shrinking sea ice increases the pressure on polar bears, who usually hunt on the ice. (By Geoff York — World Wildlife Fund)

Washington Post Staff Writer
Sunday, August 31, 2008

CHICAGO — The American Petroleum Institute and four other business groups filed suit Thursday against Interior Secretary Dirk Kempthorne and U.S. Fish and Wildlife Service Director H. Dale Hall, joining Alaska Gov. Sarah Palin’s administration in trying to reverse the listing of the polar bear as a threatened species.

On Aug. 4, the state of Alaska filed a lawsuit opposing the polar bear’s listing, arguing that populations as a whole are stable and that melting sea ice does not pose an imminent threat to their survival. The suit says polar bears have survived warming periods in the past. The federal government has 60 days from the filing date to respond.

One of the plaintiff in Thursday’s lawsuit, the National Association of Manufacturers (NAM), lauded the choice of Palin as the Republican vice presidential nominee for reasons including her advocacy of Alaskan oil and gas exploration, which many fear could be affected by the bear’s protected status.

NAM and the petroleum institute were joined in the lawsuit by the U.S. Chamber of Commerce, the National Mining Association and the American Iron and Steel Institute. They object to what they call the “Alaska Gap” in relation to the special rule the federal government issued in May in conjunction with the polar bear’s protected status. The rule, meant to prevent the polar bear’s status from being used as a tool for imposing greenhouse gas limits, exempts projects in all states except Alaska from undergoing review in relation to emissions.

NAM Vice President Keith McCoy said the group sees the rule as unfairly subjecting Alaskan industry to greenhouse gas controls and also opening a back door for greenhouse gas regulation nationwide.