Obama's Folly is isis' Stage

When isis was blazing its trail of gang pillaging, it did a VERY provocative thing; it seized oil production. At that point it seemed clear to me that Obama should stop their access; he didn't.

The black market soon became their dumping ground, greatly under-cutting the price of oil. Imagine what happened to their bankroll. With said bankroll, imagine now the ability to recruit, particularly to young, naive, dirt poor boys.

There are two important aspects to isis oil. First, getting the oil is one thing, refining is another. How is isis accomplishing this? Turkey, specifically, Erdogan. And who controls oil refining in Turkey? Erdogan's son, Real.

Note the wackiness of this sitch: Turkey is a nato country, fighting isis on the Syrian border, and yet is providing the key element to isis' ability to... well, to do just about whatever it wants.

Let's not forget that Erdogan is a psycho to the point of terrorizing his "own" peeps, the Kurds, who in fairness are punked everywhere they are. Even more, think about a recent Forbes (Forbes!) article that pegged Egyptian despot psycho Mubarak's  worth at a possible $700 billion!!! It'd be a ceiling hard to approach, but the Erdogan's bankroll must be EXTRA large by now. The lesson here is that, just as isis' fuel is oil (a convenient pun indeed) how can it be any less so for a Mubarak or Erdogan?

The second major point is who does isis'  - and Erdogan's - banking? We know that in the receding pinpoint of EM08 that banksters have ADMITTED to laundering for drug cartels and Iran. These are the biggest players around, HSBC, RBS, Standard Charter, JPMC... with that kind of complicity, aiding and abetting, it's no wonder isis is what it is; a bunch of punks living out their fantasies, just as unicorns run by 25 year olds  in Silicon Valley that ***lose money*** but are valued in the billions are capitalized by market forces.

In a time long ago, and long forgotten, there was an historic scandal: Watergate. Then Deep Throat insider/informant and now known Mark Felt uttered the infamous words, "Follow the money." He was right then, and just as much now.

Our Bonds that Blind

Matt Taibbi continues to hound the too big to fail banks, and it's to our advantage. He's done it yet again in an expose' of the rigged game that's government bonds, long held to be the safest investments around. While to some extent that may be true, keep in mind that things have changed over the course of the last few decades as debt loads have exploded at every level. Thinking about buying any Cali bonds? Look at how the governator has shredded our books and then think twice. Then read the last chapter of Michael Lewis' latest and quite excellent book, Boomerang, then think again. Lewis' book -- which profiles the way EM08 played out in different countries such as Iceland and Greece, ominously ends with his home state of California, itself a nation state at about #8 in the world's largest economies. And in case you haven't heard, we are sunk to our eyeballs in debt. And although he wasn't alone, thank you governator, for trashing our future.

Over a year ago I posed a simple question to my good friend Torben who I see eye to eye with on EM08, and while researching over a year and a half ago, I was astounded at the debt loads, not just of credit cards, student loans, car loans... let alone mortgages, but of states and munis. I asked him, "What if Cali defaults on its bonds? Then what?" Torben said, more or less, "Then we're sunk." Cali's far bigger than Greece and as big as Italy's economy! No less than JPMC chairman and ceo (it's a conflict of interest to be both, btw) Jamie Dimon thought the same. And with a self pat on the back, yours truly beat him to the punch. And yet, in spite of a couple of noodnicks like us figuring this out, not a single major mass media merchant I know of has addressed this ticking time bomb.

Personally, I think bonds have been paying off by robbing Peter to pay Paul. That is, because of our unified economy, folks in other states will pay for Cali's tragedy, similar to the way Germany has now become the EU's piggy bank. In other words, the federal government will just keep injecting us with money, because *they* know how important it is to keep California from blowing up the entire world. One thing's for sure, after reading Taibbi's piece, the cat's out of the bag on what a rigged game bonds are. Which means that to add to the long roster of welfare money cons, we can now add red, white and blue bonds.

Nothing means "not a thing." Neither is sacred anymore.

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[Some of the links in Taibbi's piece may be dead/lost; that's why I always supply the link to the original article. if you need to, just click on the title of the piece. -jp]

How Banks Cheat Taxpayers

by Matt Taibbi

Rolling Stone, 12/27/11

A good friend of mine sent me a link to a small story last week, something that deserves a little attention, post-factum.  

The Bloomberg piece is about J.P. Morgan Chase winning a bid to be the lead underwriter on a $400 million bond issue by the state of Massachusetts. Chase was up against Merrill for the bid and won the race with an offer of a 2.57% interest rate, beating Merrill’s bid of 2.79. The difference in the bid saved the state of Massachusetts $880,000.

Afterward, Massachusetts state treasurer Steven Grossman breezily played up the benefits of a competitive bid. "There's always a certain amount of competition going on out there," Grossman said in a telephone interview yesterday. "That's good. We like competition.”

Well … so what, right? Two banks fight over the right to be the government’s underwriter, one submits a more competitive bid, the taxpayer saves money, and everyone wins. That’s the way it ought to be, correct?

Correct. Except in four out of five cases, it still doesn’t happen that way. From the same piece [emphasis mine]:

Nationwide, about 20 percent of debt issued by states and local governments is sold through competitive bids. Issuers post public notices asking banks to make proposals and award the debt to the bidder offering the lowest interest cost. The other 80 percent are done through negotiated underwriting, where municipalities select a bank to price and sell the bonds.

By "negotiated underwriting," what Bloomberg means is, "local governments just hand the bid over to the bank that tosses enough combined hard and soft money at the right politicians."

There is absolutely no good reason why all debt issues are not put up to competitive bids. This is not like defense contracting, where in some situations it is at least theoretically possible that X or Y company is the world’s only competent manufacturer, say, of armor-plated Humvee doors, or some such thing. It’s still wrong and perverse when companies like Halliburton or Blackwater get sole-source defense contracts, but at least there’s some kind of theoretical justification there.

But this is a bond issue, not rocket science. In most cases, all the top investment banks will offer virtually the same service, with only the price varying. Towns and cities and states lose billions of dollars every year allowing financial services companies to overcharge them for underwriting.

It gets even worse in the derivatives markets, where banks routinely overcharge state and local governments for things like interest rate swaps, for one very obvious reason – swaps are not traded on open exchanges, so only the banks know how to price them.

Imagine what NFL gambling would be like if the casinos didn’t publish the point spreads every week, and you’ll get a rough idea of how the swap market works. If you couldn’t look it up, how many points would you give the Dolphins against the Jets next week? Two? Five? Seven? The big casinos know, because they’re taking all that action, that the real number is one point.

In the same vein, exactly how accurately do you think some local county treasurer might be able to guess the cost of an interest rate swap for his local school system? Answer: he’d probably do about as well as you or I would, guessing the odds on a Croatian soccer match.

The big banks know this, which is why there should never, ever be non-competitive bids for those sorts of financial services. In a sole-source contract for a swap deal, you’re trusting a (probably corrupt) Too-Big-To-Fail bank to give you a good deal for a product whose price is not publicly listed anywhere.

There have been numerous investigations and lawsuits across the world connected with this sort of systematic overcharging, from Erie, Pennsylvania to the notorious Jefferson County, Alabama case, to Milan, Italy (which sued Chase and four other banks for misleading them about derivative prices).

In the Erie case, Chase recommended to the locals that they hire a financial adviser to review the deal. What they didn’t tell the local government was that Chase had paid a fee to this adviser, a firm called Investment Management Advisory Group Inc., or IMAGE. They pulled the same scam with the school district of Butler County, Pennsylvania.

And in the oft-discussed Jefferson County case alone, Chase reportedly overcharged the locals $100 million for the crooked swap deals that, in a completely separate outrage, will probably leave Birmingham bankrupt for the next generation.

All of which is exactly what people like the OWS protesters are complaining about when they talk about greed and excess on Wall Street. Nobody is begrudging a bank’s desire to make money, and nobody is saying a bank shouldn’t be allowed to make money, even a lot of money, performing legitimate services for the state and the taxpayer.

But when you put a thumb on the scale in a financial services contract, the costs start to get outrageous very quickly. The banks would still do a very crisp, almost effortlessly lucrative business if they just stuck to submitting competitive bids for legitimate work – but instead of that, they for some reason have to game the system, grease politicians, rig bids, and stick the taxpayer with overpriced products. Which sucks, of course. Hopefully politicians will catch on and go the Massachusetts route more often.

We don need no stinkin limits, or, JPMC: What Becomes a Super Predator Most?

You'd think in the midst of all the ill-feelings toward the mega-banks that they'd let up on the gas. Well, you and I would think. They don't think, they prey, and, fittingly enough, that preying doesn't involve them, but you and I and the rest of the plebes who've built this country on our knees.

No, in fact, mention to jerkoffs of this strata that they should "ease up" and instead they jerk up and cinch the noose a bit tighter. Think Eli Wallach's Tuco standing atop the grave marker - a crucifix - in Leone's The Good, the Bad & the Ugly. But the ending's different in the EM08 version; Clint doesn't mercifully shoot the noose in the end and thus free Tuco, nor does he leave any gold. He just takes it all and rides off.

Now, guess which character you are and which one JPMC (or Goldman or Wells or BofA..) is in that scenario?

http://www.huffingtonpost.com/alfred-gingold/chase-home-finance-rabid_b_664109.html

Alfred Gingold
Writer, actor
Posted: July 29, 2010 03:54 PM

CHASE HOME FINANCE: RABID WEASEL

Our mortgage bank says we have to pay our next door neighbor's water bill.

Last month, we got a letter from Chase Home Finance stating that we were delinquent in our payments. So Chase paid our neighbor's water bill and established an escrow account into which it plans to collect and store such money as it says we owe--at that moment, a cool $82.91, but increasing as Chase adds its "expenditures" towards our actual taxes and water bills, which we have already paid in what is referred to in mortgage circles as "timely fashion."

We were not surprised. This is the third time-the third time that we know of-that Chase has tried to make us pay our neighbor's water bill.

We refinanced with Chase in 2004 at a rate that was, and still is, pretty good, not to mention that it was and still is a fixed rate mortgage. Perhaps it's the fixed rate thing that gets under Chase's corporate skin, because unlike any of the eight other banks who've held our mortgages over the years, Chase keeps trying to make us pay it more money than we owe. The vehicle for this petty larceny is escrow for tax and insurance payments which are, to put it politely, enhanced.

At first, we had no problem with paying our taxes and insurance through Chase. We've had the arrangement with other banks and none of them ever tried to filch more than we owed, or at least not this obviously. My wife and I share bill-paying and check-writing duties, so neither of us noticed the creep of our escrow payments, nor did we connect it with the regular letters from Chase requiring notification of insurance, which we duly sent along. In 2006 we realized something was amiss; our monthly escrow payment was huge. There were phone calls, some of a highly emotional nature, with the affectless warriors of Chase Customer Care. Eventually a polite lady called to tell us in silvery tones that there'd been a mistake, can you imagine, something about unacknowledged notices of coverage, and that we'd shortly receive a check for $4000 and change-funds, we gathered, Chase had been hanging onto for our own good. We allowed as how we'd like Chase to waive our escrow requirement, so we could pay our taxes and premiums ourselves, and the lady told us we could do that.

What she didn't say was "if you dare." To Chase, a home loan with an escrow waiver is an unexploited resource, like the Arctic National Wildlife Refuge.

Since this is the third time in two years Chase has created tax delinquencies that don't exist, we know the drill: We faxed a note to Customer Care illuminating our "concerns," pointing out that our address is not the same as our neighbor's, the water account number is different, the houses are different, the mortgages are different-you know, we're different fucking people. We included copies of the receipts for all the timely tax payments we've made. We referred to, but did not include, the last letter we sent Chase about our neighbor's water bill, from December '09, but we didn't mention the one we sent on the same subject in October '08, as we didn't want to burden Customer Care with too much to think about, much less read. And we ended stirringly by requesting, insisting, demanding that this escrow grift cease immediately.

Reliably, Chase took our remonstrance in stride and ignored it. Our new payment coupon already has a healthy chunk of escrow added, for taxes we've already paid and which Chase claims to have paid too, or intends to pay.

The last time this happened, in 2008, we went through a telephone gauntlet, repeating the story endlessly, receiving assorted "work case numbers," which were never recognized by anyone we spoke with, and collecting the names of every Customer Care Representative we spoke to, which got confusing because they only offer first names. And we continue to pay our principle and interest on time. No response. Zilch.

Eventually we sent certified letters, return receipt requested, to assorted Chase departments-Customer Care, Tax, Escrow Removal-and personally to David B. Lowman, CEO of Chase Home Finance, and Jamie Dimon, CEO of JP Morgan Chase, the mother ship. We made our case, included our documentation and declared that if we did not receive satisfaction we would file reports with the Attorney General's Office, the CAC, the Better Business Bureau and Santa.

Lowman's receipt didn't come back to us for three months, so we were not surprised to hear Dennis Kucinich snap at him for Chase's spectacular foot-dragging on mortgage modification. Yes, foot-dragging seems to be the Lowman Way, except last April, when he told Barney Frank of the House Financial Services Committee hearing that aggrieved Chase mortgage holders should come to him with their concerns, then hot-footed it the hell out of there when a group of them actually did.

Someone evidently read the one we sent to Dimon, because we got a call from an oberleutnant of the Executive Resolution Center (Orwellian, no?), who made it chillingly clear that the only way to get rid of the escrow was to pay it off. Could we find out if we're still paying for the neighbor's water? How about copies of the numerous delinquency alerts Chase claims to have sent us and we never received (maybe the neighbors did)? Not a chance.

Far be it from us to suggest that Mr. Dimon, a man the New York Times calls "a financial superstar" and Huffpo calls "The Most Dangerous Man in America," tells the troops to squeeze a few extra bucks out of non-risky mortgages. I mean, JP Morgan Chase controls 44% of the derivatives market, whatever that may be. $82.06 doesn't even qualify as chump change.

It's the principle of the thing, we suppose. Whether it's billions in dicey investments or just a few bucks of funny escrow, take a shot and if no one's the wiser, no one's the wiser.

It's very different from the attitude Matt Taibbi captured so brilliantly in his description of Goldman Sachs, the "great vampire squid wrapped around the face of humanity, etc." Chase Home Finance is less squid than weasel: a rabid weasel, wrapped around my house, pointy little claws relentlessly poking-behind the sofa cushions, in our wallets, next door on the neighbor's water meter-for any spare change or folding bills it can sweep into its fetid maw before someone shoos it away with a broom.

It is a busy weasel. We thought paying our neighbor's water bill was a mistake too stupid to be anything but honest, but it turns out Chase pulls this stuff all the time. At the ample Chase Home Finance section on the Complaints Board Website, there's a post from a guy Chase is escrowing for taxes on property he doesn't own. On the Chase Home Finance Sucks Facebook Page, we read of a man escrowed for taxes due (and paid) for the year before his mortgage was taken over by Chase.

The Los Angeles Better Business Bureau awards Chase Home Finance an F for reliability, which makes us think Chase really doesn't give a damn what anyone thinks of it--which is exactly the attitude we would recommend to Chase if we were its therapist or mother. Perhaps it shouldn't be surprising, but it somehow is, that the same banks and bankers that thought big enough to drive the whole economy over a cliff also think--and behave--really, really small.

To paraphrase Lady Bracknell: To swindle someone once may be regarded as a mistake; to swindle the same someone in the same way repeatedly looks like a business plan.

I'll be chronicling this episode of our ongoing struggle to pay Chase no more than we owe it on my blog, Joy Buzzer, where this is cross-posted. This time we're hoping to keep our postage expenditures down and to avoid hyperventilating on the phone. My prediction: they'll escrow us for David B. Lowman's water bill.