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Funding the government’s budget shortfall has usually been left to private lenders; but those loans are drying up, and servicing them is proving expensive. Both this interest burden and the need to continually attract new lenders could be avoided by tapping into the government’s credit line at its own central bank . . . .
Read more —
http://www.webofdebt.com/articles/monetizethis.php
Filed under: Ellen Brown Articles/Commentary | 116 Comments »
Prison buses are driving around empty in the Tucson area. Are Wackenhut and the DHS preparing for civil unrest?
Read more —
http://www.webofdebt.com/articles/wackenhut.php
Filed under: Ellen Brown Articles/Commentary | 51 Comments »
Economist John Kenneth Galbraith famously said, “The process by which banks create money is so simple that the mind is repelled.” If banks can create money, why are we suffering from a “credit crunch”? Why can’t banks create all the money they can find borrowers for?
Read more . . .
Filed under: Ellen Brown Articles/Commentary | 163 Comments »
Interesting observation on the Yahoo! Message Board (UltraShort Lehman 20+ Trsy ProShares), December 31, 2008:
It seems as if one branch of the government (Treasury) needs money, so they auction off T-bills and T-notes. Obviously, the lower the interest rate, the better (less interest for us taxpayers to have to pay).
So now, another pseudo-branch of the government (Federal Reserve Bank – chartered by Congress in 1913) is now buying most of these T-bills and T-notes and putting them on their balance sheet. They are doing so in a scheme to keep the interest rates as low as possible. In other words, they have stepped in front of the market and now ARE the market for T-bills and notes. There are other buyers and sellers of T-notes and bills, but due to the size of the Federal Reserve, and the depth of their pockets, they are elbowing everyone else out of the market.
How is this even possible? Isn’t this price-fixing? The government is essentially selling T-bills and notes to itself in order to fix the interest rate? Shouldn’t this be illegal? This certainly seems to have more than a whiff of fraud to it, and yet our entire economic system is based on the premise of government selling debt instruments to itself? I am new to the bond market (certainly not an insider, and not someone who has “seen it all” by any means). But my reaction as an outsider looking in, is that this is a “scam”, a “scheme”, or whatever derogatory noun you would like to place upon it.
We charge Bernie Madoff for conducting a ponzi scheme. Is this “scheme” any less fraudulent than Bernie Madoff’s simply because two agencies of the Federal Government are the ones running it?
Seriously, what am I missing? I would appreciate it if someone would step forward and tell me “hey, wait a minute. You’ve missed something here (some very important fact about this arrangement) and this is why this is all legitimate.”
Thanks in advance. I am trying to understand this crazy world we live in…
Filed under: 1 | 25 Comments »
Bernie Madoff showed us how it was done, but his Ponzi scheme was small compared to one that has been perpetrated for hundreds of years by the banking system itself. What distinguishes the legal scheme known as “fractional reserve” lending from the illegal schemes of Madoff and his ilk is that the bankers’ scheme is protected by government charter and backstopped with government funds. The sheer size of the bailout efforts today, however, indicates that the banking scheme has reached its mathematical limits and needs to be superseded by something more sustainable.
Read more: http://www.webofdebt.com/articles/ponzi.php
Filed under: Ellen Brown Articles/Commentary | 37 Comments »
The federal funds rate and the interest on 3-month Treasury bills both just hit ZERO percent. This means banks and the government are borrowing money for free. Yet demand for the T-bills at auction was four times the available supply! Who is clamoring to buy the debt of the world’s most insolvent debtor for no return at all — and why?
Read more — http://www.webofdebt.com/articles/zero_percent_t-bills.php
Filed under: Ellen Brown Articles/Commentary | 53 Comments »
Even before taking office, Obama has started his version of the “fireside chats” (updated from radio to online video) given by Roosevelt nearly weekly to reassure the public. He said on November 22 that he plans to create 2.5 million new jobs by 2011 and kick-start the economy by building roads and bridges, modernizing schools, and creating technology and infrastructure for renewable energy. These are excellent ideas, but what will they be funded with—more government debt?
Read more — http://www.yesmagazine.org/article.asp?id=3162
Filed under: Ellen Brown Articles/Commentary | 13 Comments »
The $700 billion that was arm-twisted from Congress in October was just the camel’s nose under the tent. The Paulson/Bernanke team is now prepared to pay $7.76 trillion to rescue the financial system. Prepared to pay how? Congress has not raised its debt ceiling to that level, and the Fed doesn’t have the funds on its books . . .
Read whole article here — http://www.webofdebt.com/articles/oops.php
Filed under: Ellen Brown Articles/Commentary | 4 Comments »
It was another surreal week on Wall Street, with the Dow Jones Industrial Average rising a thousand points while the economy continued to sink into its worst financial crisis since the Great Depression. More evidence of the Plunge Protection Team at work? The election was only days away . . .
Read more — http://www.webofdebt.com/articles/stepfordville.php
Filed under: Ellen Brown Articles/Commentary | 8 Comments »
October 24 marks the 79th anniversary of the October 1929 stock market crash. Many feared a repeat of this disaster on Friday, October 24, 2008; but remarkably, disaster was averted. How? Suspicious observers saw the hand of the Plunge Protection Team pulling strings behind the scenes . . .
Read more —
http://www.webofdebt.com/articles/manipulation.php
Filed under: Ellen Brown Articles/Commentary | 14 Comments »
Last night, the Presidential candidates had their last debate before the election. They talked of the baleful state of the economy and the stock market; but omitted from the discussion was what actually caused the credit freeze, and whether the banks should be nationalized as Treasury Secretary Hank Paulson is now proceeding to do. The omission was probably excusable, since the financial landscape has been changing so fast that it is hard to keep up. A year ago, the Dow Jones Industrial Average broke through 14,000 to make a new all-time high. Anyone predicting then that a year later the Dow would drop nearly by half and the Treasury would move to nationalize the banks would have been regarded with amused disbelief. But that is where we are today.
Read more —
http://www.webofdebt.com/articles/modest_proposal.php
Filed under: Ellen Brown Articles/Commentary | 13 Comments »
The Federal Reserve has assumed sweeping new powers in the last year. These increasingly controversial encroachments on the public purse warrant a closer look at the central banking scheme itself. Who owns the Federal Reserve, who actually controls it, where does it get its money, and whose interests is it serving?
Read more . . .
http://www.webofdebt.com/articles/time_to_buy_the_fed.php
Filed under: Ellen Brown Articles/Commentary | 16 Comments »
Why the extraordinary bailout measures for Fannie, Freddie and AIG? The answer may have less to do with saving the insurance business, the housing market, or the Chinese investors clamoring for a bailout than with the greatest Ponzi scheme in history, one that is holding up the entire private global banking system. What had to be saved at all costs was not housing or the dollar but the financial derivatives industry; and the precipice from which it had to be saved was an “event of default” that could have collapsed a quadrillion dollar derivatives bubble, a collapse that could take the entire global banking system down with it.
http://www.webofdebt.com/articles/its_the_derivatives.php
Filed under: Ellen Brown Articles/Commentary | 38 Comments »
The U.S. Treasury recently sought and was granted an unlimited credit line for Fannie Mae and Freddie Mac, along with the authority to buy their stock, effectively nationalizing them; but this could mean $5 trillion more in liabilities for the federal government, causing it to lose its own triple-A rating. What to do? There is a solution that would salvage the mortgage giants and cost the taxpayers nothing . . .
Read more —
http://www.webofdebt.com/articles/take_a_load_off_fannie.php
Filed under: Ellen Brown Articles/Commentary | 10 Comments »
Last week, Fannie Mae and Freddie Mac had just announced record losses, and so had most reporting corporations. Unemployment was mounting, the foreclosure crisis was deepening, state budgets were in shambles, and massive bailouts were everywhere. Investors had every reason to expect the dollar and the stock market to plummet, and gold and oil to shoot up. Strangely, the Dow Jones Industrial Average gained 300 points, the dollar strengthened, and gold and oil were crushed. What happened?
Read more . . .
http://www.webofdebt.com/articles/wag_the_dog.php
Filed under: Ellen Brown Articles/Commentary | 18 Comments »
Last week, Congress passed a housing bill that gave the Treasury Department a blank check to inject billions of U.S. taxpayer dollars into mortgage giants Fannie Mae and Freddie Mac, snatching them from insolvency. To accommodate this blank check, Congress obligingly raised its debt ceiling by $800 billion. Ouch! That’s nearly a trillion dollars. Why was it necessary to incur this potentially crippling public debt to bail out two completely private, for-profit behemoths, which have run themselves into bankruptcy with their own risky investment schemes? Policymakers said it was essential to maintain the country’s creditworthiness with foreign lenders, which today hold about one-fifth of Fannie and Freddie securities. According to a July 21 report by Heather Timmons in The New York Times. . .
Read more . . .
http://www.webofdebt.com/articles/fannie_and_freddie.php
Filed under: Ellen Brown Articles/Commentary | 5 Comments »
In response to an article I posted recently called “Standing Up to the Banks,” www.webofdebt.com/articles, a number of people have written to ask for help in defending their foreclosure actions. I started to put together materials, when I discovered that it had already been done. The Consumer Warning Network is an excellent website providing specific directions on how to raise the produce-the-note defense —
http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to/
It states:
Using the “produce the note” strategy is something all homeowners facing foreclosure can do. If you believe you’ve been treated unfairly, fight back. We have created templates for a legal request, a letter to your lender and a motion to compel to help you through the process.
WHO OWNS THE NOTE?
Your goal is to make certain the institution suing you is, in fact, the owner of the note (see steps to follow below). There is only one original note for your mortgage that has your signature on it. This is the document that proves you owe the debt.
During the lending boom, most mortgages were flipped and sold to another lender or servicer or sliced up and sold to investors as securitized packages on Wall Street. In the rush to turn these over as fast as possible to make the most money, many of the new lenders did not get the proper paperwork to show they own the note and mortgage. This is the key to the produce the note strategy. Now, many lenders are moving to foreclose on homeowners, resulting in part from problems they created, and don’t have the proper paperwork to prove they have a right to foreclose.
THE HARM
If you don’t challenge your lender, the court will simply allow the foreclosure to proceed. It’s important to hold lenders accountable for their carelessness. This is the biggest asset in your life. It’s just a piece of paper to them, and one they likely either lost or destroyed.
When you get a copy of the foreclosure suit, many lenders now automatically include a count to re-establish the note. It often reads like this: “…the Mortgage note has either been lost or destroyed and the Plaintiff is unable to state the manner in which this occurred.” In other words, they are admitting they don’t have the note that proves they have a right to foreclose.
If the lender is allowed to proceed without that proof, there is a possibility another institution, which may have bought your note along the way, will also try to collect the same debt from you again.
A Tennessee borrower recently had precisely that happen to her. Her lender, Ameriquest, foreclosed on her in July of 2007. About three months later, another bank sent her a default notice for the mortgage on the house she just lost. She called to find out what was going on. After being transferred from place to place and left on hold for lengthy periods of time, no one could explain what happened. They said they would get back to her, but never did. Now, she faces the risk of having her credit continually damaged for a debt she no longer owes.
FIGHT FOR FAIRNESS
This process is not intended to help you get your house for free. The primary goal is to delay the foreclosure and put pressure on the lender to negotiate. Despite all the hype about lenders wanting to help homeowners avoid foreclosure, most borrowers know that’s not the reality.
Too many homeowners have experienced lender resistance to their efforts to work out a payment structure to keep them in their homes. Many lenders bear responsibility for these defaults, because they put borrowers into unfair loans using deceptive, hard-sell practices and then made the problem worse with predatory servicing.
Most homeowners just want these lenders to give them reasonable terms on their mortgages, many of which were predatory to begin with. With the help of judges who see through these predatory practices, lenders will feel the pressure to work with borrowers to keep them in their homes. Don’t forget lenders made incredible amounts of money by using irresponsible practices to issue and service these loans. That greed led to the foreclosure crisis we’re in today. Allowing lenders to continue foreclosing on home after home, destroying our neighborhoods and our economy hurts us all. So, make it hard for your lender to take your home. Make ‘em produce the note!
STEPS TO FOLLOW
A. If your lender has already filed suit to foreclose on your home:
B. If you are in default, but your lender has not yet filed suit against you:
Consumer Warning Network Featured on CNN
Filed under: Networking | 58 Comments »
In a July 19 Wall Street Journal article titled “Why No Outrage?”, James Grant notes that financial behavior that would have been met with outrage in the 19th century is now met with near-silence from a too-tolerant populace. Why? He suggests that the lack of outrage may be because the old 19th century Populists actually won . . . .
http://www.webofdebt.com/articles/federal-back-fr.php
Filed under: Ellen Brown Articles/Commentary | 4 Comments »
Paul Mason, “Fannie Mae: The Credit Crunch Meets the F-word,” BBC News, July 12 2008 —
“The panic on Friday about the two US mortgage giants, Fannie Mae and Freddie Mac, is followed by the collapse of California’s IndyMac, a regional mortgage lender. . . .
“All over the world, slowly but surely, the state is becoming exposed to the debts and liabilities of the finance system. . . . On this basis I will make a prediction. Soon the ideology will move into line with the practice. Soon somebody will argue that a state-backed finance system, with much heavier regulation, is better than the one the world’s leaders have been trying to patch together at the G8 summit. . . .
“Roosevelt and his allies did not start out with a coherent vision of what to do in the face of the crisis. They improvised . . . I am not advocating a return to Rooseveltian state capitalism – but I do think the evolution of FDR’s thought is worth studying. Because what basically happened was that a coalition of interests determined to stop the finance sector from destroying the world economy found a leader prepared to go beyond muddling through and to envision a new kind of market economy where the state’s mission was to defend the little guy against the steamroller of unemployment, hunger and speculation.”
Read more: http://xrl.us/kk2o7
Filed under: In the News | 2 Comments »
PRN.FM Radio Show, 3pm EST Wednesdays. Click image for archives.
WEB OF DEBT BLOG 
Standing Up to the Banks: Make Them Produce the Note!
This is a followup to my post of July 30, 2008, “Standing Up to the Banks: How to Challenge Your Foreclosure.” The make-them-produce-the-note defense has made it to prime time. This clip is from “Good Morning America!” —
http://www.youtube.com/watch?v=fx7YkiH79nw
A lobby of many people prepared to bring this defense could have some significant clout in Congress.
Filed under: Ellen Brown Articles/Commentary | 24 Comments »