Here are some reports and excerpts from other sources regarding Congressional Insider Trading:

Forbes

You want strict ethics rules? Start at the top — with the shining example of the noble knights of the House of Representatives, which bans all gifts from lobbyists and imposes a $50 limit on gifts from anyone else. And no, you can’t give an infinite number of $49 gifts to Larry Lawmaker. Sayeth the holy rulebook.

Okay, so maybe you can give an infinite number of $9.99 gifts, and meals are specifically designated as such. Feel free to make your case to Rep. Portentous over a daily lunch at Arby’s. But still: pretty tight rules, eh?

Except that one thing you can do as a member is study pending legislation and regulatory changes, call up your broker and instruct him to trade on that nonpublic information. Do this as often as you want; you will suffer no penalty. There is no limit to how much money you can earn on insider trading in the House or Senate. Lawmakers and their staffers are specifically exempted.

Doesn’t that give you a cozy feeling, knowing that nonpublic securities info is helping make your friendly local politician more secure as he daydreams new ways to prevent, limit, or appropriate for his own reelection purposes – sorry, the needs of the Republic!– your financial success?

Wall Street Journal

WASHINGTON—Chris Miller nearly doubled his $3,500 stock investment in a renewable-energy firm in 2008. It was a perfectly legal bet, but he’s no ordinary investor.

Mr. Miller is the top energy-policy adviser to Nevada Democrat and Senate Majority Leader Harry Reid, who helped pass legislation that wound up benefiting the firm.

Jim Manley, a spokesman for Mr. Reid’s office, initially defended Mr. Miller’s purchase of shares in the company, Energy Conversion Devices Inc. He said the aide had no influence over tax incentives for renewable-energy firms, and that other factors boosted the stock.

Mr. Miller isn’t the only Congressional staffer making such stock bets. At least 72 aides on both sides of the aisle traded shares of companies that their bosses help oversee, according to a Wall Street Journal analysis of more than 3,000 disclosure forms covering trading activity by Capitol Hill staffers for 2008 and 2009.

The Journal analysis showed that an aide to a Republican member of the Senate Banking Committee bought Bank of America Corp. stock before results of last year’s government stress tests eased investor concerns about the health of the banking industry. A top aide to the House Speaker profited by trading shares of Freddie Mac and Fannie Mae in a brokerage account with her husband two days before the government authorized emergency funding for the companies. Another aide to Republican lawmakers interested in energy issues, among other things, profited by trading in several renewable-energy firms.

An analysis of financial-disclosure forms for 2008 and 2009 compiled by the website LegiStorm shows that several hundred congressional aides bought or sold stocks. At least 72 traded the stocks of companies their bosses write laws for.

A number of aides invested in financial stocks. Karen Brown, an aide to Sen. Mike Crapo (R., Idaho), a Senate Banking Committee member, traded Bank of America stock on seven occasions in 2009, according to filings. She bought a total of between $3,003 and $45,000 of the bank’s shares in three trades on April 17 and April 27 and sold between $51,002 and $115,000 in September. Her minimum gain during that period would have been 43%.

At the time of the purchases, Bank of America was discussing with the government the findings of “stress tests” used to gauge the safety of U.S. banks. On May 7, 2009, BofA shares surged when the stress-test results were made public, easing investor fears.

After it was contacted by the Journal, Mr. Crapo’s office said the trades were made by Mrs. Brown’s husband, “independent of any direction from Mrs. Brown.” The office said Mrs. Brown has since filed an amended financial-disclosure form.

Terri McCullough, a 41-year-old aide to House Speaker Nancy Pelosi, had several successful trades in 2008 in a Charles Schwab brokerage account with her husband, Howard Wolfson, a former spokesman for Hillary Clinton’s 2008 presidential campaign.

Mr. Wolfson says he bought about $2,000 worth of Freddie Mac and $2,700 worth of Fannie Mae on July 11, 2008, just two days before the Fed authorized emergency funding to Freddie and Fannie. Mr. Wolfson says he bought the stock after reading a news story on the possibility of the U.S. taking over one or both mortgage-finance companies.

As the Speaker of the House, Ms. Pelosi was briefed by the administration and Treasury Department officials about the steps they were taking in the financial crisis. Ms. McCullough served as Ms. Pelosi’s chief of staff, though she focuses on social issues and matters concerning Ms. Pelosi’s San Francisco-area district.

In one day Mr. Wolfson bought and sold Freddie Mac and Fannie Mae shares as the stocks jumped about 40%, for a profit of about $2,000, he said. The couple made a total of $20,000 on trading in 2008, he said. Mr. Wolfson says that he made the trades on his own, without telling his wife or getting any information from her.

Ms. McCullough said: “I was not involved in discussions regarding Fannie Mae or Freddie Mac, and I was unaware of the Bush Administration’s or Congress’s plans regarding them. I do not make trades and had no knowledge of the trades my husband made in 2008 until after they were made.”

READ MORE

 The Atlantic

When Congress isn’t sending billions in taxpayer money to bail out Wall Street firms, some of its legislators appear to be using information unavailable to the general public to personally profit on stock trades.

So says a study just published in Business and Politics. A portfolio that imitates the stock purchases of House members outperforms the market by more than 6 percent in the course of a year, its authors found. “A previous study of the stock returns of U.S. Senators in a leading finance journal indicates that their portfolios show some of the highest excess returns ever recorded over a long period of time, significantly outperforming even hedge fund managers,” they wrote. “Until now, there has been no similar study of Members of the U.S. House of Representatives.”

Now we know that from 1985 to 2001, the specific interval used to generate the data, senators do the best, House members follow, and the average American investor brings up the rear.

UPDATE TO THIS STORY: I have just read that Texana Hollis has been told she can move back in immediately and live in the home for the rest of her days. Apparently, HUD realized the error of their ways… my question is what did they do with all of her belongings that were kicked to the curb when eviction officers showed up to boot her? And is HUD going to pay for someone to come back and move her in? Seriously, with all the wasted money our government just peels through each day, is the system so screwed up as to allow this to even happen? And what if Texana never makes it out of the hospital where she is now after suffering an anxiety attack? Dear God help us… help the American people wake up en masse to the horrors of our government, to the Obama Administration and to the jackasses in Congress, especially the corrupt Senate; and help them have the resolve needed to forever correct the bad choices made in past elections. Help them to not elect “pretty people” or “slick people” who will say what “our itching ears want to hear.” We need leadership, we need bold people and we really need courageous people in Congress especially. And, as Americans, we need to stop living beyond our means and stop asking, no expecting, the federal government to do everything for us. It is a beast and we must tame it. Amen.

This story just flat pisses me off and makes my blood boil… the damn federal government wastes BILLIONS every year and one could make the argument that we waste BILLIONS every day fighting other people’s wars, allowing fraud and corruption to run amuck throughout every level, nook and cranny of the massive bureaucracy in our federal government; yet, these snakes at HUD don’t even have the decency to figure out how to keep a 101 year old woman in her home who got a reverse mortgage? Incomprehensible… and I still want to know how they foreclosed and booted her to the sidewalk on a reverse mortgage! Reverse mortgages are supposed to be due and payable upon the senior’s death… Texana is still living!

I would like to encourage every reader of this story to send HUD Secretary Shaun Donovan a scathing email! Let him have it with every bit of emotion that this story builds within you! Seriously folks, don’t hold back and while you’re at it, let the communist OBAMA have it via a carbon copy of that email. I won’t even give Obama the respect of calling him President anymore, he’s just an idiot occupying space for 14 more months.

Here are the two email addresses for you:

HUD Secretary: Secretary.Donovan@hud.gov
Barack Obama:  Oh yeah, I forgot, BHO is too exalted to give us servants his email address, CLICK HERE to submit a form with your message.

All of you in government need to go. You let stuff like this happen on your watch and you deserve to be thrown out in the street. Why does this happen? Because you have let the bank executives get away with crime after crime after crime. As a regular citizen, I would have gone to jail years ago for the same crimes the banks and politicians have committed over and over and over. Shame on all of you. I’m disgusted and I can’t wait to see you thrown on your backsides in November 2012!

Watch in horror:

News flash: it was never about the American taxpayer or homeowner. The lies are so bold-faced these days it’s shocking. They literally couch the entire TARP bailout and HAMP program as protecting Americans and our “way of life” and then in the same breath implement programs that do the exact opposite and protect the antithesis of the “American citizen.”

Watch and be shocked (or maybe not so much…)!

Visit msnbc.com for breaking news, world news, and news about the economy

Journalist Maxwell wrote:
Bondi wasn’t even in the state.
She was in Kona, Hawaii.
Bondi was attending a meeting of the Conference of Western Attorneys General, an organization comprised of “the chief legal officers of 15 Western states and three Pacific territories.” (Someone needs a new map.)
Bondi’s staff said taxpayers paid only the conference’s $625 registration fee.
Before Bondi makes another trip to Hawaii, she needs to provide better answers about what’s happening in her office here in Florida — and make things right.
And the state needs to stop the revolving door that taxpayers not only fund, but which often ends up smacking them in the face.
smaxwell@tribune.com or 407-420-6141
(read more here…)
http://articles.orlandosentinel.com/2011-07-30/news/os-scott-maxwell-revolving-door-0731120110730_1_special-counsel-bondi-claims-investigators

CWAG Hawaii Event Website (July 10 – 13, 2011)
http://www.cwagweb.org/hawaii/index.html
(The website introduction states:) The Conference of Western Attorneys General, CWAG Chair New Mexico Attorney General Gary King and Hawaii Attorney General David Louie invite you to the 2011 CWAG Annual Meeting in Kona, Hawaii. Join your colleagues as CWAG explores the most pertinent legal issues during the days and the evenings enjoying the tropical paradise of Hawaii at our social events.
The information in the website includes travel tips and hotel information to facilitate early air and hotel arrangements.
We hope to see you in Hawaii!

ONE OF THE MANY IMPORTANT EVENTS OF THE CWAG HAWAII CONFERENCE THAT PAM BONDI FELT COMPELLED TO ATTEND…
http://www.cwagweb.org/hawaii/CWAG11_Agenda.pdf
Sunday, July 10
8:00 am – 1:30 pm Attorneys General and Family Catamaran Snorkel Sail
(AG’s and AG Families Only — Closed to Public)

Some of the other very important events include cooking training, photography training, henna tattoos, fitness training…
http://www.cwagweb.org/hawaii/CWAG11_Social_Agenda.pdf

Some of the noteworthy speakers/topics: (Hint: not one word about fraudulent foreclosures/ fraudulent docs in land and court records/ investigating crooked mill attorneys, etc…or did I miss something..?)
Alliance Partnership Briefing
(AG Staff only — Closed to Public)
Alliance Partnership staff will provide an overview
of the Alliance Partnership Program and details on the
international component which has 31 State Attorneys
General Offices in the United States, Mexico’s Federal
Attorneys General Office (PGR) and all the State Attorneys
General Offices in Mexico collaborating in the training of
Investigators, Forensic Scientists, Prosecutors and Judges
across Mexico.

The Future of Agriculture — Can the World’s Food
Needs Be Met?
• Scott S. Partridge, Vice President for Global Strategy,
Monsanto Company

Futuristic Uses of Wireless Technologies
• Tammi Terrell, Vice President and General Manager —
San Diego/Nevada/Hawaii, AT&T

Enhancing State Revenues and Increasing Efficiency
Detecting Fraudulent Tax Returns
• Andy Bucholz, Director of Market Planning, LexisNexis
Risk Data Solutions

Improving the Contracting Process —
A Business Viewpoint
• Steve Calkins, Senior Vice President,
Business Solutions Division, Office Depot, Inc.

Commerce and Taxes in New and E Marketplaces:
Current State Tax Issues from New Business Models
• Rick Salzman, Executive Vice President
and General Counsel, TracFone
• Laurie Smalling, Director Business Strategy, Public
Affairs and Government Relations, Wal-Mart Stores, Inc.
• April Ammeter Sakane, Vice President and Associate
General Counsel, DIRECTV
• Mark Schichtel, Senior Vice President
and Chief Tax Officer, Time Warner Cable
• Braden Cox, Director, State Public Policy, Amazon

Protecting Intellectual Property
Moderator: Washington Attorney General Rob McKenna
• Brad Smith, Senior Vice President and General
Counsel, Microsoft

Debt Collection Initiatives
Moderator: Massachusetts Attorney General
Martha Coakley
• Fred Blitt, President, National Association
of Retail Collection Attorneys
• Richard Munroe, President, Debt Buyers Association
• Gary Portney, President, Convoke Systems, Inc.

Huh? You read that correctly. Because Speaker Pelosi cannot find enough votes to pass the deeply unpopular ObamaCare bill in a constitutional way, she is hoping you and other Americans won’t notice, or won’t care, whether she passes ObamaCare in an unconstitutional and blatantly corrupt way.

Her latest plan is called the “Slaughter Rule”, which would allow the House to vote on a different bill and “deem” the Senate’s ObamaCare bill as being “passed” at the same time as the other bill is passed, without having an actual up and down vote on the ObamaCare bill.

Said Pelosi in an interview: “It’s more insider and process-oriented than most people want to know….but I like it, because people don’t have to vote on the Senate bill.”

Pelosi may like “deeming” laws passed, but passing laws without voting on them is blatantly unconstitutional. As former federal judge Michael McConnell wrote in the Wall Street Journal, “It may be clever, but it is not constitutional. To become law…the Senate health-care bill must actually be signed into law. The Constitution speaks directly to how that is done. According to Article I, Section 7, in order for a “Bill” to “become a Law,” it “shall have passed the House of Representatives and the Senate” and be “presented to the President of the United States” for signature or veto. Unless a bill actually has “passed” both Houses, it cannot be presented to the president and cannot become a law.”

Speaker Pelosi and President Obama are counting on you, your friends, and your family not to notice or care that they are doing this. That’s why together, we must get the truth out and tell everyone that we know about what they are trying to do.

This is just one more example of the bribery and corruption that has been used to try and pass ObamaCare, like the Cornhusker Kickback and the Louisiana Purchase. If they are willing to corrupt our constitutional system right before our eyes to pass Obamacare, why should we have any confidence that they won’t corrupt your healthcare when nobody is paying attention?

I don’t know about you but I know those I talk to are really upset and there is a palpable rage growing that I know is real.

I have a fairly unique perspective in that I have regular business relationships with community leaders in at least 15 states. These men and women are very in touch with their communities and could pretty quickly give you some characterizations of how people are feeling… how things are going… what are people angry about… what people are happy about, etc. etc.

I’m going to be inviting all of them to come to this forum and share what’s going on from their perspective.

Why is this important? Well, I truly believe we are facing an all-out assault on our constitution. Like, it’s happening right now… I really believe we have to truly “get in the fight” right now or we will lose valuable ground to people who want to legislate and tax us to no end - their policies will absolutely lead to a diminished America.

I’m sure that those who fought our previous wars didn’t “want” to have to leave comforts of home or work hard, train long and ultimately “sacrifice” their life and the comforts of home but it became a crisis of moral necessity. Do not make the grave mistake of thinking that we can’t literally go back 200 years in short form from a freedom perspective. A revolution is what we need now. A peaceful one in hopes that a peaceful revolution will prevent a bloody one.

We are blessed that, at current, we do not literally need to bear arms and fight a bloody revolution because the oppression hasn’t grown to that level yet. If we are lazy, apathetic and simply choose to remain in this “fog of materialistic pleasure” and forget how much blood has had to be spilled to have these freedoms, well, if that happens, I believe these freedoms will disappear.

Please, do not let us as a nation, be ignorant of World History and American History. Don’t let us be the generation that history looks back on and says, “they just fell asleep at the wheel and didn’t stop it when it should have. Now look at all the pain and blood we’ve had to give to try and get what they had back.”

I pray we don’t convey that terrible price to our kids or grandchildren but that may become reality unless we do act; and we WILL.

So, get involved in this and in your communities. It’s that important that it demands you give “getting involved” some of your time. Make a conscious, daily effort to be a defender of liberty and our precious constitutional rights. Protect them vigorously.

YOU NEED TO WATCH THE VIDEO BELOW.

www.youtube.com/watch?v=LCHtw6WbbnM

This has been an interest of mine for some time but time being what it is, I haven’t had time do more work and posts on the topic of the Fed.

Until I can get to it in more detail, please go check out this site at www.fedshame.com. Good stuff by Aaron Krowne from ml-implode.com

Support those are challenging these power-mongers. Let them know that we are behind them. Like Sheila Bair at the FDIC. Marcy Kaptur in Ohio. Put pressure on your state reps and your governor. Let them start to feel the full wrath of the American people. This is how we shift power back to the people. It’s our country… don’t let someone take it from you.

Lane Houk

From the Wall Street Journal

By DAMIAN PALETTA and DEBORAH SOLOMON

WASHINGTON — Treasury Secretary Timothy Geithner blasted top U.S. financial regulators in an expletive-laced critique last Friday as frustration grows over the Obama administration’s faltering plan to overhaul U.S. financial regulation, according to people familiar with the meeting.

The proposed regulatory revamp is one of President Barack Obama’s top domestic priorities. But since it was unveiled in June, the plan has been criticized by the financial-services industry, as well as by financial regulators wary of encroachment on their turf.

Among those gathered in the Treasury conference room were Federal Reserve Chairman Ben Bernanke, Securities and Exchange Commission Chairman Mary Schapiro and Federal Deposit Insurance Corp. Chairman Sheila Bair.

Friday’s roughly hourlong meeting was described as unusual, not only because of Mr. Geithner’s repeated use of obscenities, but because of the aggressive posture he took with officials from federal agencies generally considered independent of the White House. Mr. Geithner reminded attendees that the administration and Congress set policy, not the regulatory agencies.

Mr. Geithner, without singling out officials, raised concerns about regulators who questioned the wisdom of giving the Federal Reserve more power to oversee the financial system. Ms. Schapiro and Ms. Bair, among others, have argued that more authority should be shared among a council of regulators.

“You are talking about tremendous regulatory power being invested in whatever this entity is going to be,” Ms. Bair told the Senate Banking Committee last month. “And I think, in terms of checks and balances, it’s also helpful to have multiple views being expressed and coming to a consensus.”

Officials from the Federal Reserve and the Office of the Comptroller of the Currency, meanwhile, have questioned the creation of a new federal agency to oversee consumer regulations, a move that would take away powers from both institutions.

The government’s proposal would empower the government to take over and break up large financial companies, merge two bank regulators, and toughen oversight of mortgages, among other things.

Administration officials say they aren’t worried about the overhaul’s prospects, adding that there is consensus on key aspects, including the regulating of over-the-counter derivatives. Treasury officials say they expected a big debate over the complex legislation. The first piece, which addresses executive pay, passed the House Friday.

“The industry is already back to their pre-meltdown bonuses,” said White House Chief of Staff Rahm Emanuel. “We need to make sure we don’t slip back to risky behavior where the institutions have all the upside and the taxpayers have all the downside, which is why we need regulatory reform.”

Neal Wolin, Treasury’s deputy secretary, said Mr. Geithner told regulators “they have the prerogative to express their views, but he wanted to make sure that, since everyone had agreed on the importance of achieving reform this year, everyone stayed focused on that goal.”

Government officials said Mr. Geithner had expected regulators to object to parts of the plan that threatened their power or authority, but Treasury officials appeared caught off guard at how much the criticism resonated with lawmakers.

Mr. Geithner wanted to tell the attendees they shouldn’t let turf battles get in the way of fixing a system that is clearly broken, Mr. Wolin said. He declined to comment on Mr. Geithner’s tone and language.

In addition to Mr. Bernanke, Ms. Bair and Ms. Schapiro, other attendees at Friday’s meeting were: Fed Governor Daniel Tarullo, Comptroller of the Currency John Dugan, Commodity Futures Trading Commission Chairman Gary Gensler and Office of Thrift Supervision Acting Director John Bowman.

Spokespeople for all regulatory agencies represented at the meeting declined to comment.

At a House hearing last month, Mr. Geithner said it was “perfectly reasonable and understandable” that different federal agencies would balk at giving up powers. “Frankly, all arguments need to be viewed through that basic prism,” he told the House Financial Services Committee.

The administration’s proposal would give the Fed broad discretion to supervise any major U.S. financial company and would also create a “financial services oversight council” to coordinate policy and help resolve disputes among regulators.

How power would be balanced between the Fed and this entity has emerged as a flash point, one that administration officials debated. Ultimately, officials felt the regulatory structure needed a single point of accountability, arguing that one weakness in the government’s response to the financial crisis last year was clarity over which entities were in charge.

The administration has pushed for Congress to complete the overhaul by the end of the year. House Financial Services Committee Chairman Barney Frank (D., Mass.) and Senate Banking Committee Chairman Christopher Dodd (D., Conn.) have both said that remains the goal.

Both men, however, have suggested the overhaul could change from Treasury’s proposal. Sen. Dodd favors giving extra powers to an oversight council rather than the Fed. Mr. Frank said Monday lawmakers were still working on a way to “make sure you have a sufficient broad base of participation and input” and “to make sure you have effective authority.”

He said the flap several months ago over the Federal Reserve’s role in allowing American International Group Inc. to pay large bonuses to employees “damaged the Federal Reserve politically.”

The top Republicans on these committees, Sen. Richard Shelby (R., Ala.) and Rep. Spencer Bachus (R., Ala.), have also expressed skepticism over ceding too much power to the Fed.

“A rush to judgment where they basically throw these things together without any consensus is going to be a disaster,” Rep. Bachus said.

Write to Damian Paletta at damian.paletta@wsj.com and Deborah Solomon at deborah.solomon@wsj.com

Q: Who can claim the credit?

A: In general, the IRS says you may be eligible if you bought your main home, located in the U.S., after April 8, 2008, and before Dec. 1, 2009 — and if you (and your spouse, if you’re married) haven’t owned any other main home during the three-year period ending on the date of purchase. That means you might be eligible even if you owned a home for many years before that period.

However, there are numerous other qualifications.

Q: How much is the credit?

A: That depends on when you bought the home and other factors, such as your income and the home’s price.

If you bought during the 2008 period and qualify for the credit, the maximum credit is generally $7,500. But it’s only half that amount if you’re married and filing separately from your spouse. Even though it’s called a credit, it’s really an interest-free loan. You generally have to repay it over a 15-year period, without interest, in 15 equal installments, the IRS says. (There are several exceptions to this repayment rule. We warned you this was tricky.)

The rules are more generous if you buy a new home during the 2009 period and meet all the qualifications. In that case, the maximum amount generally is $8,000, or half that amount if you’re married filing separately. More important, you don’t have to repay the credit at all unless that home “ceases to be your main home within the 36-month period beginning on the purchase date,” the IRS says.

Initially, there was some confusion about whether the $8,000 maximum credit would apply if someone bought a home in 2009 and chose to claim the credit on their return for 2008. It’s now clear the $8,000 maximum limit does indeed apply, says Mark Luscombe, principal tax analyst at CCH, a Wolters Kluwer business. Naturally, though, “this doesn’t help people who actually bought homes in the 2008 qualifying period, and who are limited to a $7,500 credit that must be repaid,” he says.

Additionally, the credit generally is limited to the amounts mentioned above — or 10% of the home’s purchase price, whichever is less. For example, if you bought a new home this year for $70,000, the maximum amount of the credit would be limited to 10% of that amount, or $7,000.

Q: How do the income limits work?

A: You may be eligible for the full amount of the credit if your adjusted gross income, with certain modifications, is $75,000 or less — or $150,000 or less if married and filing jointly. However, the credit begins to disappear, or “phase out,” if your income exceeds those amounts. You can’t claim the credit at all if your income is $95,000 or more, or $170,000 or more if married and filing jointly, the IRS says.

Q: What if I built a new home? How does that work?

A: You are considered having purchased it “on the date you first occupied it,” the IRS says.

Q: I own more than one home. How do I figure out which is my “main” home? And does it have to be a house?

A: The IRS says your main home is “the one you live in most of the time.” No, it doesn’t have to be a house. It can be “a house, houseboat, house trailer, cooperative apartment, condominium, or other type of residence.”

Q: Are there are other qualifications?

A: Yes. You can’t claim it if your home is located outside the U.S. You also aren’t eligible if you’re a nonresident alien, if you inherited the home or got it as a gift, or if you acquired it from a “related person,” such as your spouse, parents or grandparents.

Q: Will the credit help me if I don’t owe any tax?

A: Yes. The credit “may give you a refund” even if you owe no tax, the IRS says.

Q: What form do I use?

A: Form 5405. The IRS recently revised it and posted it on its Web site (www.irs.gov), along with instructions. Dean Patterson, an IRS spokesman, says “programming is being done to electronically process Form 5405″ to claim the $8,000 credit for homes bought in 2009. The IRS “will be able to process these returns electronically beginning March 30″ this year, he says.

Q: Where do I put the credit on my Form 1040?

A: Line 69.

Q: I’ve already filed my return for 2008. Can I still claim it? If so, how?

A: Yes. File what’s known as an “amended” return. Use Form 1040X, and attach Form 5405.

Q: If I buy this year, should I claim the new credit on my 2008 or 2009 tax return?

A: That can be tricky, and you may need to consult a tax pro. In general, most people who buy this year and qualify for the new credit probably will want to take it on their tax return for 2008, says Tax Mam’s Claudia Hill. “They’ll get their money more quickly,” she says.

But some people might be better off claiming the credit on their 2009 returns. These would include eligible homebuyers who buy this year, whose financial circumstances changed during 2009 and who might qualify for a larger credit on their returns for 2009 than the prior year. An example would be someone whose income was too high to get any of the credit for 2008 but who recently lost his job and thus would be eligible for the full credit on his 2009 return, to be filed next year.

It’s hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president’s policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis.

The illusion that Barack Obama will lead from the economic center has quickly come to an end. Instead of combining the best policies of past Democratic presidents — John Kennedy on taxes, Bill Clinton on welfare reform and a balanced budget, for instance — President Obama is returning to Jimmy Carter’s higher taxes and Mr. Clinton’s draconian defense drawdown.

Mr. Obama’s $3.6 trillion budget blueprint, by his own admission, redefines the role of government in our economy and society. The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents — from George Washington to George W. Bush — combined. It reduces defense spending to a level not sustained since the dangerous days before World War II, while increasing nondefense spending (relative to GDP) to the highest level in U.S. history. And it would raise taxes to historically high levels (again, relative to GDP). And all of this before addressing the impending explosion in Social Security and Medicare costs.

To be fair, specific parts of the president’s budget are admirable and deserve support: increased means-testing in agriculture and medical payments; permanent indexing of the alternative minimum tax and other tax reductions; recognizing the need for further financial rescue and likely losses thereon; and bringing spending into the budget that was previously in supplemental appropriations, such as funding for the wars in Iraq and Afghanistan.

The specific problems, however, far outweigh the positives. First are the quite optimistic forecasts, despite the higher taxes and government micromanagement that will harm the economy. The budget projects a much shallower recession and stronger recovery than private forecasters or the nonpartisan Congressional Budget Office are projecting. It implies a vast amount of additional spending and higher taxes, above and beyond even these record levels. For example, it calls for a down payment on universal health care, with the additional “resources” needed “TBD” (to be determined).

Mr. Obama has bravely said he will deal with the projected deficits in Medicare and Social Security. While reform of these programs is vital, the president has shown little interest in reining in the growth of real spending per beneficiary, and he has rejected increasing the retirement age. Instead, he’s proposed additional taxes on earnings above the current payroll tax cap of $106,800 — a bad policy that would raise marginal tax rates still further and barely dent the long-run deficit.

Increasing the top tax rates on earnings to 39.6% and on capital gains and dividends to 20% will reduce incentives for our most productive citizens and small businesses to work, save and invest — with effective rates higher still because of restrictions on itemized deductions and raising the Social Security cap. As every economics student learns, high marginal rates distort economic decisions, the damage from which rises with the square of the rates (doubling the rates quadruples the harm). The president claims he is only hitting 2% of the population, but many more will at some point be in these brackets.

As for energy policy, the president’s cap-and-trade plan for CO2 would ensnare a vast network of covered sources, opening up countless opportunities for political manipulation, bureaucracy, or worse. It would likely exacerbate volatility in energy prices, as permit prices soar in booms and collapse in busts. The European emissions trading system has been a dismal failure. A direct, transparent carbon tax would be far better.

Moreover, the president’s energy proposals radically underestimate the time frame for bringing alternatives plausibly to scale. His own Energy Department estimates we will need a lot more oil and gas in the meantime, necessitating $11 trillion in capital investment to avoid permanently higher prices.

The president proposes a large defense drawdown to pay for exploding nondefense outlays — similar to those of Presidents Carter and Clinton — which were widely perceived by both Republicans and Democrats as having gone too far, leaving large holes in our military. We paid a high price for those mistakes and should not repeat them.

The president’s proposed limitations on the value of itemized deductions for those in the top tax brackets would clobber itemized charitable contributions, half of which are by those at the top. This change effectively increases the cost to the donor by roughly 20% (to just over 72 cents from 60 cents per dollar donated). Estimates of the responsiveness of giving to after-tax prices range from a bit above to a little below proportionate, so reductions in giving will be large and permanent, even after the recession ends and the financial markets rebound.

A similar effect will exacerbate tax flight from states like California and New York, which rely on steeply progressive income taxes collecting a large fraction of revenue from a small fraction of their residents. This attack on decentralization permeates the budget — e.g., killing the private fee-for-service Medicare option — and will curtail the experimentation, innovation and competition that provide a road map to greater effectiveness.

The pervasive government subsidies and mandates — in health, pharmaceuticals, energy and the like — will do a poor job of picking winners and losers (ask the Japanese or Europeans) and will be difficult to unwind as recipients lobby for continuation and expansion. Expanding the scale and scope of government largess means that more and more of our best entrepreneurs, managers and workers will spend their time and talent chasing handouts subject to bureaucratic diktats, not the marketplace needs and wants of consumers.

Our competitors have lower corporate tax rates and tax only domestic earnings, yet the budget seeks to restrict deferral of taxes on overseas earnings, arguing it drives jobs overseas. But the academic research (most notably by Mihir Desai, C. Fritz Foley and James Hines Jr.) reveals the opposite: American firms’ overseas investments strengthen their domestic operations and employee compensation.

New and expanded refundable tax credits would raise the fraction of taxpayers paying no income taxes to almost 50% from 38%. This is potentially the most pernicious feature of the president’s budget, because it would cement a permanent voting majority with no stake in controlling the cost of general government.

From the poorly designed stimulus bill and vague new financial rescue plan, to the enormous expansion of government spending, taxes and debt somehow permanently strengthening economic growth, the assumptions underlying the president’s economic program seem bereft of rigorous analysis and a careful reading of history.

Unfortunately, our history suggests new government programs, however noble the intent, more often wind up delivering less, more slowly, at far higher cost than projected, with potentially damaging unintended consequences. The most recent case, of course, was the government’s meddling in the housing market to bring home ownership to low-income families, which became a prime cause of the current economic and financial disaster.

On the growth effects of a large expansion of government, the European social welfare states present a window on our potential future: standards of living permanently 30% lower than ours. Rounding off perceived rough edges of our economic system may well be called for, but a major, perhaps irreversible, step toward a European-style social welfare state with its concomitant long-run economic stagnation is not.

Mr. Boskin is a professor of economics at Stanford University and a senior fellow at the Hoover Institution. He chaired the Council of Economic Advisers under President George H.W. Bush.

1.  GSE Refinancing for Responsible Homeowners Suffering from Falling Home Prices.

Fannie Mae and Freddie Mac (the government sponsored enterprises, or GSEs) will refinance the mortgages for 4-5 million homeowners with loans owned or guaranteed by the GSEs. The streamlined refinancing program is designed to help borrowers with loan-to-value ratios above 80 percent up to 105 percent.

2.  $75 Billion Homeowner Stability Initiative to Reach up to 3 to 4 Million At-Risk Homeowners

The goal of the 3-year Homeowner Stability Initiative is to reduce the monthly payment of homeowners to affordable levels using $75 billion from TARP and the GSEs.  The program will be available for home owner-occupants “at risk of imminent default” even if they are current in making mortgage payments, as well as those already delinquent.  It will only apply to mortgages at or below the GSE conforming loan limits.

Key elements of the plan: 

• The lender world first be required to reduce rates, without assistance, so the monthly payment does not exceed 38 percent of borrower income (debt-to-income ratio of 38 percent). After that, federal assistance would be used to match, on a dollar-for-dollar basis, further reductions to bring the debt-to-income ratio down to 31 percent.
• After 5 years, the rate could increase gradually to the loan rate in effect at the time of the modification.
• Lenders may reduce monthly payments by reducing principal. Federal assistance would share the cost (up to the amount the lender would receive for reducing interest rates).
• As an incentive to loan servicers, they will receive $1,000 up front for each qualified loan modification. For borrowers who stay current on the modified loan, servicers will receive a monthly “pay for success” fees up to $1,000 a year for 3 years.
• As an incentive to borrowers, borrowers will receive a monthly reduction in their mortgage balance, up to $1,000 a year for 5 years.
• As an additional incentive to help borrowers avoid going into delinquency, servicers will receive $500 and mortgage holders will receive $1,500, if they modify at-risk mortgages before the borrower becomes delinquent.
• As an incentive for lenders to modify more mortgages, the Obama plan-together with the FDIC-has developed a partial guarantee initiative. The Treasury Department will establish an insurance fund of up to $10 billion to discourage lenders from foreclosing on mortgages, by limiting their lose if home prices decline more than expected. Mortgage holders of modified mortgages could receive a payment on each modified loan, linked to home price index declines.
• Treasury will establish uniform guidelines for loan modifications, working with bank regulators and the FDIC. All financial institutions receiving Financial Stability Plan assistance will have to agree to follow the guidance. The GSEs will use the guidance for their loans, and the government will work to apply them “when permissible and appropriate” to all federally owned or guaranteed loans, including Ginnie Mae, FHA, Treasury, Federal Reserve, FDIC, VA and Agriculture loans.

The plan includes other elements, including:

• Strong oversight – We won’t hold our breath until this happens. We may die waiting…
• “Allow Judicial Modification of Home Mortgages During Bankruptcy for Borrowers Who Have Run Out of Options.” Only mortgages under GSE loan limits would qualify. Homeowners must first seek a loan modification. Legislation is needed. The plan also anticipates legislation to give FHA and VA authority to pay partial claims if there is a bankruptcy or voluntary loan modification so holders of FHA and VA guaranteed loans are not hurt.
• Funding for displaced renters and neighborhood stabilization.
• Improving Hope for Homeowners and other FHA programs.

3.  Supporting Low Mortgage Rates by Strengthening Confidence in Fannie Mae and Freddie Mac

The Obama Plan beefs up the current support for the GSEs.

The Treasury Department is doubling, from $100 billion to $200 billion for each GSE, its pledge to invest money to make sure that the GSEs maintain a positive net worth.  This will further assure that the federal government is committed to maintaining the mission of the GSEs.  In a statement issued today, Director Lockhart described this mission as “providing much-needed liquidity, stability and affordability to the housing market at this time.”  He went on to say that doubling the commitment “should remove any possible concerns debt and mortgage-backed securities investors have about the strong commitment of the U.S. Government to support Fannie Mae and Freddie Mac.”  He expects the increased commitment to help keep interest rates low, which will help both current and future homeowners.  The additional $200 billion is from HERA in connection with the conservatorship, not from the Financial Stability Plan or TARP.

 Treasury will continue to buy GSE MBSs, as announced when the GSEs were placed into conservatorship.

The GSEs will be able to increase their portfolios by $50 billion to $900 billion, and increase their outstanding debt.   

The Administration will work with the GSEs to support state housing finance agencies.

[END]

Ok, folks, that’s a quick summary of the proposals. There are some good measures here. However, I am extremely wary that any of this will actually result in true help on the street. We have seen hundreds of billions already wasted. Oversight was promised and none to speak of was actually provided in any effective measure.

“That’s all folks!”

This is exactly what you can say if the American people allow Congress and Pres. Obama to pass this “stimulus” bill. What a joke… this has nothing to do with stimulus and everything to do with PORK! Any politician that votes “yes” on this bill will assume the title of “PIG.”

So, here’s how the World’s Biggest Pork Chop is cut up…

• $819 billion total (as of 1/28/09)
• $550 billion in new spending, described as thoughtful and carefully targeted priority investments with unprecedented accountability measures built in.
• $275 billion in tax relief ($1,000 tax cut for families, $500 tax cut for individuals through SS payroll deductions)
• $ 90 billion for infrastructure
• $ 87 billion Medicaid aid to states
• $ 79 billion school districts/public colleges to prevent cutbacks
• $ 54 billion to encourage energy production from renewable sources
• $ 41 billion for additional school funding ($14 billion for school modernizations and repairs, $13 billion for Title I, $13 billion for IDEA special education funding, $1 billion for education technology)
• $ 24 billion for “health information technology to prevent medical mistakes, provide better care to patients and introduce cost-saving efficiencies” and “to provide for preventative care and to evaluate the most effective healthcare treatments.”
• $ 16 billion for science/technology ($10 billion for science facilities, research, and instrumentation; $6 billion to expand broadband to rural areas)
• $ 15 billion to increase Pell grants by $500
• $ 6 billion for the ambiguous “higher education modernization.”

[Source: Committee on Appropriations: January 15, 2009]

Doesn’t sound so bad, right? That’s why they just bullet point these BILLIONS in the broad strokes. But…

Here is a further breakdown of the Porky Package:

• $1.1$ Billion to SAVE AMTRAK
• $600 Million to purchase vehicles for the federal government
• $400 Million for Global Warming Research
• $2.4 Billion for Carbon Capture and Sequestration Technology Demonstration Projects
• $350 Million for Research into using Renewable Energy to power weapons systems and military bases
• $500 Million for Energy Efficient Manufacturing Demonstration Projects
• $3 Billion to the National Science Foundation
• $1.9 Billion to the Department of Energy for basic research into the physical sciences
• $600 Million to NASA
• $650 Million to help households convert to Digital TV
• $400 Million for NOAA Habitat Restoration
• $500 Million to the Bureau of Indian Affairs to address maintenance backlogs at public facilities

When is the money being is going to be spent, and on what?

The government wouldn’t be able to spend at least one-fourth of a proposed $825 billion economic stimulus plan until after 2010 (oh yeah, there’s the stimulus we need! let’s wait for 2 years to see how bad this thing can get!), according to a preliminary report by the Congressional Business Office that suggests it may take longer than expected to boost the economy. The government would spend about $26 billion of the money this year and $110 billion more next year, the report said. About $103 billion would be spent in 2011, while $53 billion would be spent in 2012 and $63 billion between 2013 and 2019 (What the hell are these flippin politicians smoking? This is unreal. Is it just me or do you ask yourself the same things? I mean, really… what reality do these guys live in?)

• Less than $5 billion of the $30 billion set aside for highway spending would be spent within the next two years, the CBO said.

• Only $26 billion out of $274 billion in infrastructure spending would be delivered into the economy by the Sept. 30 end of the budget year, just 7 percent.

• Just one in seven dollars of a huge $18.5 billion investment in energy efficiency and renewable energy programs would be spent within a year and a half.

• About $907 million of a $6 billion plan to expand broadband access in rural and other underserved areas would be spent by 2011, CBO said.

• Just one-fourth of clean drinking water projects can be completed by October of next year.

• $275 billion worth of tax cuts to 95 percent of filers and a huge infusion of help for state governments is to be distributed into the economy more quickly.

[Note: The CBO's analysis applied only to 40 percent of the overall stimulus bill, and doesn't cover tax cuts or efforts; a CBO report outlining all of its costs is expected in the next week or so.]

• The Obama administration said $3 of every $4 in the package should be spent within 18 months to have maximum impact on jobs and taxpayers; if House or Senate versions of the bill do not spend the money as quickly, the White House will work with lawmakers to achieve the goal of spending 75% of the overall package over the next year and a half.

[Source: AP: Three-quarters of stimulus to go in 18 months; January 22, 2009; Bloomberg News: Much of Stimulus Wont Be Spent Before 2011, CBO Says; January 20, 2009; link]

Now that you have had your fill of Pork, what do you say we all go PIG OUT? -  I think we deserve it because the politicians sure seem to be ‘eatin good these days.

Everyday, I read the headlines and half of me can’t believe what’s happening… and it keeps happening; the other half completely believes this madness. Our government officials are out of control. They’ve lost it… I mean completely lost their marbles but we’re to blame because we’ve elected these looney tunes to office and we continue to do so. The average American is being fleeced. We are going to get taxed beyond comprehension. Mark my words. It’s coming. It will come in all sorts of nasty realities. We’re on the hook for $700 Billion. $350 Billion has just been slammed through the system. Gone. And what do we have as a result? More foreclosures, more write-downs, more people losing their homes, their jobs.

And today, I get the word… us taxpayers are going to fund some more acquisitions. The M&A Departments are singing all the way to the bank – oh, excuse me, they are the bank… Bank of America was going to buy Merrill Lynch BUT they got cold feet. The bank, already the recipient of $25 billion in committed federal rescue funds, said that it was unlikely to complete its Jan. 1 purchase of the ailing Wall Street securities firm because of Merrill’s larger-than-expected losses in the fourth quarter, according to a person familiar with the talks.

So our good friend and consumer advocate, Hank Paulson, is coming to the rescue. “We can’t let this happen! Bank of America needs more! $25 Billion isn’t enough. The US economy will crash if Merrill Lynch fails and B of A doesn’t complete this M&A! Get ‘em more… get ‘em more!”

Since when did it become OK for the US taxpayer to fund a private company’s buyout of another private company? Excuse me? I don’t give you permission to use my tax dollar to do this! I sure hope someone out there has something to say about this. Write your US Senator… Write your Congressman/woman… Let them all know that they are going to  lose their seat if they continue to back this craziness. We’ve got to send strong messages. We’ve got to get out of our comfort zones of being too busy to get involved and start the barrage of emails and phone calls. Folks, this is the only way. It’s going to take a concerted effort from the masses. YOU have to do your part and hold your friends, family, neighbors and co-workers accountable to the same.

For more on the latest B of A news… read this article from the Wall Street Journal.

Wednesday, January 14, 2009
WASHINGTON — The U.S. government is close to finalizing a deal that would give billions in additional aid to Bank of America Corp. to help it close its acquisition of Merrill Lynch & Co., according to people familiar with the situation.

Discussions over these funds began in mid-December when Bank of America approached the Treasury Department. The bank, already the recipient of $25 billion in committed federal rescue funds, said that it was unlikely to complete its Jan. 1 purchase of the ailing Wall Street securities firm because of Merrill’s larger-than-expected losses in the fourth quarter, according to a person familiar with the talks.

Treasury, concerned the deal’s failure could affect the stability of U.S. financial markets, agreed to work with the Charlotte, N.C., lender on the “formulation of a plan” that includes new capital from the $700 billion Troubled Asset Relief Program, according to the person familiar with the talks. The amount and terms are still being finalized, this person said. Details are expected to be announced with Bank of America’s fourth-quarter earnings, due out Tuesday.

Any possible arrangement might protect Bank of America from losses on Merrill’s bad assets. There would be a cap on the amount of losses the bank would have to absorb, with the federal government being on the hook for the remainder, said one person familiar with the matter.

Both the Federal Reserve and the Federal Deposit Insurance Corp., alongside the Treasury, are involved in the negotiations, say people familiar with them. That suggests that the aid could take a similar form to the hand extended to Citigroup Inc. late last year.

The commitment of funds is further evidence of the banking system’s delicate condition and its hunger for more capital, despite billions of dollars already invested in financial institutions by the government. So far, the U.S. has already injected $25 billion into Bank of America, which includes $10 billion that Merrill Lynch would have received if the sale to Bank of America had not closed.

The talks with Bank of America were driven by Treasury Secretary Henry Paulson, people familiar with the matter said, because he was concerned that without help the deal wouldn’t close, leaving Merrill adrift. When the merger closed at the beginning of this year, it was with the understanding the two sides would hammer out a plan afterwards, said a person familiar with the talks.

The Treasury has committed the entire first half of its TARP funds, although some of it remains unspent. Earlier this week, President George W. Bush formally notified Congress that he was seeking access to the second half of the funds on behalf of President-elect Barack Obama. Congress has yet to release the money.

One person familiar with the matter said Bank of America would receive TARP funds, making use of the difference between the money committed and spent. In essence, as it did with aid to Detroit, the Bush administration is spending funds not yet approved by Congress that would otherwise go to an Obama Treasury.

Lawmakers, who are widely unhappy with how the TARP program has been run, have spent the week discussing what kinds of new conditions they would like to impose on recipients of funds in the second tranche. They would like to see more spending on aid for homeowners. Obama officials have expressed their desire to gain access to the additional funds quickly. A key vote in the Senate could come Thursday or Friday.

Federal Reserve Board Chairman Ben Bernanke said Tuesday that he’d like to see much of the second half spent to support the financial system, where continuing weakness is causing alarm among policymakers.

In the end, investors and financial institutions could face as much as $2 trillion of losses from bad U.S. loans and bonds, far more than anybody thought even a few months ago. A sustained recovery for markets and the economy is unlikely until the hole is filled. Bank stocks are falling sharply as investors come to grips with the worsening outlook for loan losses.

Analysts at Goldman Sachs were the latest to raise estimates of potential U.S. loan losses. In a report released late Tuesday night, Goldman economists estimated that losses from delinquent U.S. residential mortgages alone would hit $1.1 trillion as home prices sink, up from an earlier estimate of $780 billion.

Add in losses from commercial real estate, credit cards, auto debt and business debt, and Goldman’s loan-loss estimate hits $2.1 trillion. Only half of those losses have yet been recognized. Many will be borne by investors and banks overseas. The estimate doesn’t count losses that U.S. institutions will take on bad overseas loans that they hold.

Bank of America is expected by some analysts to report a loss for the fourth quarter, or at least a smaller profit than expected. It is not known exactly how much Merrill lost in the same time period. Merrill’s problems largely stem from the deterioration of assets on its books and trading losses, said a person familiar with the matter.

Bank of America’s heft and diversity helped buffer it through the early stages of this financial crisis. But the U.S. bank is now broadly exposed to the nation’s economic ills. With its recent acquisitions of troubled California mortgage lender Countrywide Financial Corp. and Merrill, the bank is now a major player in every corner of the battered U.S. financial system. It has its hand in credit cards, home mortgages, underwriting, merger advice and wealth management, all areas that are under stress during one of the deepest recessions since World War II.

The deal between Bank of America and Merrill was forged during the hectic weekend last September that saw Lehman Brothers Holdings Inc. collapse and giant insurer American International Group Inc. start to unravel. Merrill Chief Executive John Thain, worried his firm would be next, pressed for a quick deal.

In the aftermath of Bank of America’s acquisition of Merrill — valued at $50 billion when it was announced and worth $19.36 billion when it closed — its chief executive, Kenneth D. Lewis, was viewed as a savior of the financial-services industry, having rescued both Merrill and Countrywide without government assistance. Mr. Lewis had also argued that Bank of America didn’t need the first round of federal rescue funds that the Treasury offered last fall.

“These were funds we did not need and did not seek,” Mr. Lewis told employees late in 2008.

The request for additional funds may feed criticism that Mr. Lewis overreached during a time of crisis to expand his operation. Mr. Lewis “has hit a stumbling block here — the economy,” said Nancy Bush, a banking analyst with NAB Research LLC in Annandale, N.J. “I think he will have to stop doing deals.”

Analysts, worried about rising unemployment and a pullback by U.S. consumers, have been slashing Bank of America’s estimates for the fourth quarter. Some are predicting a loss and arguing that Bank of America will be forced to cut its dividend once again as a way of shoring up capital.

Jeffrey Harte of Sandler O’Neill & Partners revised his fourth-quarter forecast this week to a loss, citing capital-markets losses and rising credit costs. He predicted $2.3 billion in write-downs associated with collateralized debt obligations and subprime-mortgage-backed securities. Citigroup Inc. analyst Keith Horowitz said the bank might record a $3.6 billion fourth-quarter loss.

Bank of America is also reeling from two high-level Merrill departures within a week and concerns about cultural tensions between the two firms.

Mr. Lewis has already recommended his board not award top executives bonuses for 2008, warning that performance would be below expectations. Having received billions in federal aid, he faces pressure to show the bank is grappling with its problems — beyond the 30,000 to 35,000 job cuts it has already announced — and is making significant contributions to a U.S. recovery.

To that end, the bank intends to break out new loan originations made during the fourth quarter, a first-time disclosure it hopes will mitigate concerns about new lending.

Well, here’s just another outrageous aspect of the “bailout.”

The Bailout Funds (ie. TARP Funds) were to be used to help “struggling” banks get a cash infusion so that they would continue to lend money to consumers to keep the economy going. At least this is what our pal “Hank” Henry Paulson said to us American citizens and Congress to sell this craziness to us. You know, it was an emergency and in order for the US economy to survive, we gotta get these banks liquid so that they’ll continue to lend. All that…

So here’s the real deal… US Banks are using the money alright but they’re stingier than ever when it comes to lending. Less people are getting approved right now, today than were 6 months ago. FACT. Oh, and the money, you know, the $350 BILLION TAX PAYER DOLLARS that has already been spent… where has that gone. Well, it seems that Congress didn’t see fit to actually mandate how that money could be spent so guess what banks are doing with the money? Buying other banks. Oh yeah, us taxpayers are helping, no not helping, funding banks to buy other banks. Oh, and it also seems that some pretty neat little language was slipped into that bailout bill by our friend Hank that allows any bank which buys another bank to WRITE OFF ALL OF THEIR BAD DEBT. A yeah, they can just take all that bad debt and get a tax write off for it.

Folks, this is beyond criminal. I’m sorry but this just gets me steamin mad and I hope it does the same to you! We have got to put an end to this. We are collectively being  used by government and special interests to make the rich richer. We are being hosed and lied to on a regular basis.

If you want some proof of this, read on. I welcome all comments.

TARP Funds Fueling Global Buyouts, Not Lending (CLICK HERE to link to story)

Bank of American Corp. (BAC), which is getting $15 billion from the U.S. government as part of the Treasury Department’s $250 billion “recapitalization” effort, is doubling its stake in state-owned China Construction Bank Corp., and will hold a 20% stake worth $24 billion in China’s second-largest lender when that deal is finalized.

PNC Financial Services Group Inc. (PNC), which will get $7.7 billion from Treasury’s Troubled Assets Relief Program (TARP), is using that cash infusion to help finance its $5.2 billion buyout of embattled National City Corp. (NCC).

And U.S. Bancorp (USB), which received a $6.6 billion capital infusion from that same rescue package, has acquired two California lenders – Downey Savings & Loan Association, F.A., a subsidiary of Downey Financial Corp. (DSL), and PFF Bank & Trust, a subsidiary of PFF Bancorp Inc. (OTC: PFFB). U.S. Bank agreed to assume the first $1.6 billion in losses from the two, but says anything beyond that amount is subject to a loss-sharing deal it struck with the Federal Deposit Insurance Corp. (FDIC).

While the Treasury Department’s investment of more than $250 billion in U.S. financial institutions has been billed as a strategy that will bolster the health of the banking system and also jump-start lending, buyout deals such as these three show that the recapitalization plan has actually had a much different result – one that’s left whipsawed U.S. investors and lawmakers alike feeling burned, an ongoing Money Morning investigation continues to show.

Those billions have touched off a banking-sector version of “Let’s Make a Deal,” in which the biggest U.S. banks are using government money to get even bigger. While that’s admittedly removing the smaller, weaker banks from the market – a possible benefit to consumers and taxpayers alike – this trend is also having a detrimental effect: It’s reducing the competition that’s benefited consumers and kept the explosion in banking fees from being far worse than it already is.

This all happens without any of the economic benefits that an actual increase in lending would have had. And it does nothing to address the billions worth of illiquid securities that remain on (or off) banks’ balance sheets – as the recent Citigroup Inc. (C) imbroglio demonstrates.

In fact, Treasury’s TARP program has even managed to create a potentially illegal tax loophole that grants banks a tax-break windfall of as much as $140 billion. Lawmakers are furious – but possibly powerless, afraid that a full-scale assault on the tax change could cause already-done deals to unravel, in turn causing investor confidence to do the same.

One could even argue that since this first bailout (the $700 billion TARP initiative) has fueled takeovers – and not lending – the government had no choice but to roll out the more-recent $800 billion stimulus plan that was aimed at helping consumers and small businesses – a move that may spur lending and spending, but that still adds more debt to the already-sagging federal government balance sheet.

At the end of the day, these buyout deals are bad ones no matter how you evaluate them, says R. Shah Gilani, a retired hedge fund manager and expert on the U.S. credit crisis who is the editor of the Trigger Event Strategist, which identifies trading opportunities emanating from such financial-crisis “aftershocks” as this buyout binge.

“Why in the name of capitalism are taxpayers being fleeced by banks that are being given our money to grow their businesses with the further backstop of more of our money having to be thrown to the FDIC when they fail?” Gilani asked. “Consolidation does not mean that bad loans and illiquid securities are somehow merged out of existence. It means that they are being acquired under the premise that a larger, more consolidated depositor base will better be able to bear the weight of those bad assets. What in heaven’s name prevents depositors from exiting when the merged banks continue to experience massive losses and write-downs? The answer to that question would be … nothing.”

Lining Up for Deal Money

In launching TARP, U.S. Treasury Secretary Henry M. “Hank” Paulson Jr. said the government’s goal was to restore public confidence in the U.S. financial services sector – especially banks – so private investors would be willing to advance money to banks and banks, in turn, would be willing to lend.

“Our purpose is to increase the confidence of our banks, so that they will deploy, not hoard, the capital,” Paulson said.

Whatever Treasury’s actual intent, the reality is that banks are already sniffing out buyout targets, while snuffing out lending – and the TARP money is the reason for both.

Fueled by this taxpayer-supplied capital, the wave of consolidation deals is “absolutely” going to accelerate, says Louis Basenese, a mergers-and-acquisitions expert who is also the editor of The Takeover Trader newsletter. “When it comes to M&A, there’s always a pronounced ‘domino effect.’ Consolidation breeds more consolidation as industry leaders conclude they have to keep acquiring in order to remain competitive.”

Indeed, banking executives have been quite open about their expansionist plans during media interviews, or during conference calls related to quarterly earnings.

Take BB&T Corp. (BBT). During a conference call that dealt with the bank’s third-quarter results, Chief Executive Officer John A. Allison IV said the Winston-Salem, N.C.-based bank “will probably participate” in the government program. Allison didn’t say whether the federal money would induce BB&T to boost its lending. But he did say the bank would likely accept the money in order to finance its expansion plans, The Wall Street Journal said.

“We think that there are going to be some acquisition opportunities – either now or in the near future – and this is a relatively inexpensive way to raise capital [to pay the buyout bill],” Allison said during the conference call.

And BB&T is hardly alone. Zions Bancorporation (ZION), a Salt Lake City-based bank that’s been squeezed by some bad real-estate loans, recently said it would be getting $1.4 billion in federal money. CEO Harris H. Simmons said the infusion would enable Zions to boost “prudent” lending and keep paying its dividend – albeit at a reduced rate.

Sounds good, right? Not so fast. During a conference call about earnings, Zions Chief Financial Officer Doyle L. Arnold said any lending increase wouldn’t be dramatic. Besides, Arnold said, Zions will also use the money “to take advantage of what we would expect will be some acquisition opportunities, including some very low risk FDIC-assisted transactions in the next several quarters.”

Buyouts Already Accelerating

With all the liquidity the world’s governments and central banks have injected into the global financial system, the pace of worldwide deal making is already accelerating. Global deal volume for the year has already passed the $3 trillion level – only the fifth time that’s happened, although it took about three months longer for that to happen this year than it did a year ago.

At a time when the global financial crisis – and the accompanying drop-off in available deal capital (either equity or credit) – has caused about $150 billion in already-announced deals to be yanked off the table since Sept. 1, liquidity from the U.S. and U.K. governments has ignited record levels of financial-sector deal making.

According to Dealogic, government investments in financial institutions has reached $76 billion this year – eight times as much as in all of 2007, which was the previous record year. And that total doesn’t include the $250 billion in TARP money, or other deals that Paulson & Co. are helping engineer – JPMorgan Chase & Co.’s (JPM) buyouts of The Bear Stearns Cos. and Washington Mutual Inc. (WAMUQ), for instance.

If You Can’t Beat ‘em… Buy ‘em?

When it comes to identifying possible buyout targets, M&A experts such as Basenese say there are some very clear frontrunners.

“I’d put regional banks with solid footprints in the Southeast high on the list, and for two reasons,” Basenese said. “First, demographics point to stronger growth [in this region] as retirees migrate to warmer climates – and bring their assets along for the trip. Plus, the Southeast is largely un-penetrated by large national banks. An acquisition of a regional bank like SunTrust Banks Inc. (STI) would provide a distinct competitive advantage.

There’s a very good reason that smaller players may be next: Big banks and small banks have the easiest times – relatively speaking, of course – of raising capital. It’s toughest for the regional players. Big banks can tap into the global financial markets for cash, while the very small – and typically, highly local – banks can raise money from local investors.

The afore-mentioned stealthy shift in the U.S. Tax Code actually gives big U.S. banks a potential windfall of as much as $140 billion, says Gilani, the credit crisis expert and Trigger Event Strategist editor. What does this tax-change do? By acquiring a failed bank whose only real value is the losses on its books, the successful suitor would basically then be able to use the acquired bank’s losses to offset its own gains and thus avoid paying taxes.

“While everyone was panicking, the Treasury Department slipped through a ruling that allows banks who acquire other banks to fully write-off all the acquired bank’s bad debts,” Gilani says. “For 22 years, the law was such that if you were to buy a company that had losses, say, of $1 billion, you couldn’t just take that loss against your own $1 billion profit and tell Uncle Sam, ‘Gee, now my loss offsets my profit, so I don’t have any profit, and I don’t owe you any tax.’ It was a recipe for tax evasion that demanded an appropriate law that only allows limited write-offs over an extended period of years.”

Given these incentives, who will be doing the buying? Clearly, the biggest U.S.-based banks will be the main hunters. But The Takeover Trader’s Basenese says that even foreign banks will be on the prowl for cheap U.S. banking assets.

Basenese also believes that Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) will be “big spenders.” Each will use TARP funds to help accelerate its transformation from an investment bank into a bank holding company. The changeover will require each company to build up a big base of deposits. And the best way to do that is to buy other banks, Basenese says.

“One thing [the wave of deals] does is to restore confidence in the sector,” Basenese said. “It will go a long way in convincing CEOs that it’s safe to use excess capital to fund acquisitions, and to grow, instead of using it to defend against a proverbial run on the bank.”

Not everyone agrees with that assessment. Investors who play the merger game correctly will do well. But the game itself won’t necessarily whip the industry into championship form, Gilani says.

“While consolidation, instead of outright collapses, in the banking industry may serve to relieve the FDIC of its burden to make good on failed banks, it in no way guarantees fewer failures,” he said. “In fact, it may only serve to guarantee, in some cases, even larger failures.”

These collective officials have the gall to spend $350 billion of our tax dollars without demanding strict accountability. The committee they selected to be this “watchdog” has to come out and say “hey, we’re here to do this and you’re not letting us hold you accountable and you’re not being transparent about where this money is going.” Unreal… If only it was truly not real. Read the story below from the Wall Street Journal.

TARP Oversight Panel Urges Transparency and Accountability

By DAMIAN PALETTA and MICHAEL R. CRITTENDEN

WASHINGTON — U.S. lawmakers should demand more accountability from the government’s $700 billion financial rescue package before releasing the second half of the funds, the head of the program’s watchdog panel said Friday.

Elizabeth Warren, who chairs an oversight committee set up by Congress to oversee TARP, photographed during a December interview.

“We would urge Congress to consider the accountability and transparency questions, the question of whether money is going to be used for foreclosures, and the overall strategy issues as part of any additional requests made for more money,” said Harvard Law School Professor Elizabeth Warren, who chairs a bipartisan panel charged with overseeing the Treasury Department’s Troubled Asset Relief Program.

The Obama administration is already looking at a broad revamp of the program, which has faced criticism from Democrats and Republicans over its implementation. Obama’s team is expected to launch a major program to prevent foreclosures. House Financial Services Committee Chairman Barney Frank (D., Mass.) said he is working with the Obama administration to try and come up with restrictions on how the second installment of the fund is used, including aid to cities.

Ms. Warren said she was “very pleased that the incoming administration is focused on these issues.”

The Obama’s administration will likely work closely with congressional leaders before asking for the rest of the TARP money, as Congress can pass a resolution disapproving of any request. President-elect Barack Obama could veto any disapproval resolution, but that could prove politically risky and unsettling to markets.

The new report by Ms. Warren’s panel, the second released since Congress created TARP in October, illustrates the controversial nature of the program. She said Treasury has still not adequately explained how it is selecting banks for its $250 billion program to inject capital directly into the financial system.

“The panel’s initial concerns about the TARP have only grown, exacerbated by the shifting explanations of its purposes and the tools used by Treasury,” the report said. It said Treasury had “not yet explained its strategy” for stabilizing the financial markets.

The report said long and short-term credit spreads suggest Treasury has effectively forestalled a financial collapse by injecting billions of dollars into the financial system. Still, the panel suggested that the efforts have “not affected liquidity in credit markets or reassured the capital markets that large financial institutions are strong credits.”

“Although half the money has not yet been received by the banks, hundreds of billions of dollars have been injected into the marketplace with no demonstrable effects on lending,” the document goes on to say.

Neel Kashkari gives an update on the TARP program in Washington on Thursday.

The report faulted Treasury on a variety of fronts, saying it has: no ability to ensure banks lend the money they’ve received from the government; no standards for measuring the success of the program; and that it ignored or offered incomplete answers to panel questions.

These shortcomings, the report suggests, could undermine the goal of various programs. “For Treasury to advance funds to these institutions without requiring more transparency further erodes the very confidence Treasury seeks to restore,” the report said.

The bipartisan panel reserved its most strident criticism for Treasury’s approach to dealing with the foreclosure crisis at the root of the ongoing economic turmoil.

“The bailout money doesn’t require a specific approach,” Ms. Warren said. “It entrusts Treasury with developing an approach, and that’s what Treasury should be doing.”

Treasury officials debated whether to use part of the TARP program to prevent foreclosures but ultimately decided against it, worried about any program’s effectiveness and the possibility it would discriminate against homeowners who’ve been struggling to make their mortgage payments.

They have instead relied on industry-led efforts by Fannie Mae, Freddie Mac and others to voluntarily modify troubled loans into more affordable products.

Additionally, the report faulted Treasury for not explaining why it declined to force all TARP recipients to adopt a Federal Deposit Insurance Corp. mortgage loan modification plan. Citigroup Inc. had to agree to use the program to streamline loan changes as part of its help from the government in November.

“Treasury’s refusal to answer this question is one of the most troubling aspects of their letter,” the report said of the Dec. 30 letter sent by Treasury to the panel in response to submitted questions. 

Ok, so let’s break this down a bit because the pundits and the politicians are each spinning this in their own direction and one has to have some serious fog lights to eat through the “haze” that these guys spin in. Throw in the fact that no one is really exposing the REAL issues here to see if the actual bailout plan will truly deal with the real issues.

First, we need something to be done. Let’s get past this. It is true our entire financial sector is going through the dry heaves here as there’s not much more it can throw up. The entire financial system is starting to seize up and the constant coverage on these issues is pumping fear into the system and the heart of every American and even the foreign markets. So, if we can all agree that all of us losing our pensions, retirement funds, stocks, money market funds, and more home value is not a good thing then we can move on to what the solution should look like fundamentally because we do need a big solution to right the ship.

To start, one must have a basic understanding of the root of the problem. Yep, you guessed it, the mortgage meltdown which has led to the foreclosure crisis. Financial institutions, mainly the largest banks and investment banks on Wall Street are essentially holding large pools of residential and commercial loans (notes and corresponding mortgages) that are, for all intents and purposes, worthless – right now. Worthless because they cannot find a buyer for these notes (loans) with the current state of affairs. We all know that these “assets” are worth something and probably a lot more than just “something” BUT, if you can’t find a buyer then it’s really hard to place any real value on them currently. The assets are literally “backed” by mortgages and, ultimately, the real estate they’re tied to. We know the homes are worth something. That’s obvious.

Without getting into a lot of complicated explanations, this is the root of the problem. Now, you need to understand the process of the mortgage market because this is EXTREMELY important in the entire crisis. Almost 100% of all residential and commercial loans made since the late ’90′s were made by a “bank” or “lender.” Almost immediately after closing (and often before closing), these lenders sold these loans in “pools” to an “aggregator” of loans. Ok, a little glossary break down here. A pool of loans is two or more loans combined into a package. Smaller lenders might sell a package or pool of 50-100 loans to larger lender. The larger lender might buy 30 pools of 100 loans from 30 different smaller lenders. Now they have 3000 loans that they pool together into one big pool. You with me so far???

Ok, next here’s what happens… a larger bank (Chase, Countrywide, Wachovia, GMAC, Homecomings Financial, Fremont, Option One, etc) then sells these 3000 loans to another entity. This “other” entity is often a subsidiary but sometimes not and this other entity is a “Sponsor” and usually a “Master Servicer” entity. This means that this company is going to be the servicer of these loans. A servicer is the company that is going to collect the monthly payments, manage the escrow accounts, etc. Now, most people think that this is who they owe the money to for the loan they have because they received that notice about 60 days after closing notifying them that the “Servicing” of their loans was being transferred to XYZ Company. Because they make the payments to this servicer they automatically assume that this is now their “lender.” Remember when I just said that these large pools are usually sold to subsidiaries of the large banks? Well, it’s no wonder that these Master Servicing companies have highly similar names. What’s the difference between “America’s Wholesale Lender” and “Countrywide Home Loans, Inc.?” Well, a lot and very little. Both do business as “Countrywide.” One is a lender and one is a Master Servicer. Confusing? Yes. Purposefully? Yes. If there is confusion in Wall Street, it’s on purpose because these guys aren’t “stupid.” Stay with me here…

So here’s what happens to this pool of 3000 loans. The Master Servicer then sells these same 3000 loans to a “Depositor.” What really and actually happens is a bona fide sale of all of these loans. Now, here’s an EXTREMELY important point, pay attention right here. When a “loan” is sold, what is really sold is the “Note.” The Note is sometimes called the “Promissory Note.” The Note is the only and real evidence of the debt. The ORIGINAL Note that is. That’s why you’ll sometimes here this called “selling the paper.” The paper debt, the NOTE, is the debt and has an actual value because you, the homeowner and borrower, have signed that note with your signature and pledged (promised) to pay that debt back. The MORTGAGE is what you give to the original lender (and any subsequent purchase of the Note) as “security” in case you don’t pay the debt back. The mortgage gives the owner of that Note the security (the home or property) and thus the right to foreclose if you don’t pay it back.

Now, this is important… the Mortgage doesn’t give just <i>anyone</i> the right to foreclose, It gives the actual OWNER of the Note the right to foreclose. The owner of the actual and original Note. Not a copy of the Note but the ORIGINAL note. This is a very important point that must be understood and grasped, by everyone, including the US Government. I think that it’s highly possible that this bailout package might be relieving financial institutions of defaulted debt even thought that same institution may not even have the actual Notes to evidence the defaulted debt. And, is it really defaulted? How do we know that these entities weren’t already paid for these Notes? It depends on exactly WHO they are bailing out but if it’s any entity other than the Trust, those entities have already been paid for the Notes!

Back to this pool of 3000 loans… so the Master Servicer has sold the 3000 loans to a Depositor for about 102.5% of the face value of these Notes. When a sale of these 3000 loans is made, the Depositor literally pays the seller of the loans a lump sum of money and the Master Servicer in turn hands over the Notes for that payment of money. And then this same Depositor sells the 3000 loans to a Trust and “deposits” (hence the name “Depositor”) these Notes into the Trust. The Trust pays the Depositor a lump sum of money and in return receives the Notes. The Master Servicer or “Servicer” gives the Notes, receives a lump sum payment and then promises to “pay” the trust a monthly payment on the money that the Trust paid it. This large monthly payment to the Trust is usually guaranteed by the Servicer and is an aggregate or sum of all of the individual 3000 borrowers who paid their monthly payment to that Servicer. The servicer collects all of those monthly payments, takes off their fees, disburses some of it to escrow accounts, etc. and then makes the payments to the Trust. The Servicers also have multiple layers of insurance that insure them against borrower defaults because the Servicers do in fact make representations and warranties on the monthly payments to the Trust that really owns these Notes.

This whole process is called “Securitization.” This is a simplified explanation of what happens. Through this Securitization process, these Notes are packaged into what’s called “Asset Backed Securities” or “Mortgage Backed Securities” in what’s called a CDO (Collaterlized Debt Obligation) and are sometimes called ABS or MBS Pools. The Depositor creates something called a “Special Purpose Vehicle” (SPV) to deposit these Notes into the SPV and then these Notes are sold and deposited into the Trust. The Trust is owned by all sorts of investors, individual and companies, pension funds, foreign investors. etc. They collectively own these Trusts. A “Trustee” acts as an Agent for the Trust and on behalf of the Trust in a fiduciary relationship.

So, now that you’re a securitization guru, let’s get the rubber to meet the road in all of this.

Here’s the real rub. I told you that, legally speaking, the only evidence of this debt (the loan) is the actual and original Note; and this makes sense! If not, anyone could create a Note, get a copy of your signature (which they can get in public records on the mortgage you signed and was subsequently recorded in public records), paste it on that created Note and allege that you owe them this money. Also, because this Note is changing hands some 3-6 times in the securitization process, everyone touching it can create a copy and allege you owe them the money even though they’ve already sold the original Note and have been paid for it by the new buyer! Just like a personal check, the Note has to be “Endorsed” to the new buyer of the Note by the Seller of that Note. They literally need to stamp on the last page of the Note, “Pay to the Order of Without Recourse” and then stamp or write in the name of the new buyer. On a bona fide Note, this is EXACTLY what you will see and find. Everytime this Note changes hands, it needs an actual endorsement.

So here’s what literally happening with ALL of these foreclosures… the Trusts are the actual owners of the majority of all of these Notes. Yes, the Trusts. A trust has a funky name such as Harborview Mortgage Loan Trust 2006-5 or Meritage Loan Trust 2007-2. There’s no such Trust named Countrywide Home Loans or Chevy Chase Bank or Citimortgage or GMAC Mortgage Co. or Residential Funding Corporation or Amtrust Bank or Fremont Investment and Loan or Option One Mortgage Co. – you get the point. All of these entities are either lenders or servicers. Period. They are NOT the Trusts that your loan and everyone’s loans were sold to. Don’t let anyone fool you. Over 98% of all loans made since 2000 were securitized in just the fashion I described above.

Now, I can only speak to the 100 or so foreclosure cases I have personally read the complaints on in Florida and a few in Ohio. In 100% of these foreclosure cases, the suit is being brought NOT by the Trust but by the servicer or the trustee. Both of these entities are agents for the Trust but they are NOT the owners of these Notes unless they show that they re-purchased that Note from the Trust. In about 70% of the foreclosure cases we have seen, the Plaintiff (usually the servicer) is also alleging that they have LOST THE NOTE or that is has been destroyed. No, that was NOT a typo or mistake. Well, if the Note is actually lost, they don’t have any actual evidence of the debt anymore.

So here’s the question to start asking your Congressman or Congresswoman, your State Senators, your Governor and every other politician that has any influence and may want to be re-elected… if the Federal Government is going to buy all of these non-performing or defaulted loans (ie. Notes), who are they actually going to buy them from? The Trusts or the Servicers?

And, if they can actually tell us this in plain language, are they actually going to buy the original Notes? Not a copy and not some affidavit from some $15/hour employee who is swearing that they saw the original note before it was actually lost or destroyed but the original Note?

I’m not kidding here. I’m seeing 70% of the cases allege a Lost Note! When they produce the Note, what this Servicer alleges is the original note is, in fact, only a COPY of the note and is NOT the original. Want to know how I know it’s NOT the original?

This is easy folks. The entire securitization process that any and all Notes are involved is and must be disclosed in filings with the SEC. Yes, every Note is involved a securitization. And this MUST be filed with the SEC. And in these filings with the SEC, these companies MUST disclose all of the parties involved in that process and what that “chain” of securitization actually follows. That chain MUST be evidenced on every single Note on the last page of that Note in the form of an endorsement. “Pay to the order of…” Every Note should have at a minimum of 2 endorsements and more likely, 4-5 endorsements. If a Servicer or an attorney for that Lender or Servicer produces a copy of a Note that they allege is the original Note, all one needs to do is look for those endorsements. If the endorsements don’t follow EXACTLY what they have already filed with the SEC, they got real problems folks. Either they are lying to the court (called fraud) or that Note is faulty in that the proper endorsements aren’t there and most likely, both are real legal issues.

Also, in these foreclosure cases, the Plaintiff (a Servicer or Trustee) is actually alleging that they have the RIGHT to foreclose and that they are the <u>owner and holder of the Note</u> (which gives rise to the right to foreclose). Now, us folks and attorneys who are wise to this charade know that they are NOT the owner of these Notes because they actually disclose these facts right in their SEC filings! But no judge in this country is going to or has the time to go and do fact checking on these issues and hold these Plaintiffs accountable to what they are alleging in their foreclosure lawsuits. 98% of all foreclosure filings go uncontested by the borrower. This means that 98% of the time, the foreclosure process is nothing more than a rubber stamp process with judges defaulting borrowers who don’t show up to defend themselves. The Servicing companies are getting away with highway robbery – rather, home robbery. Yes, this is happening. Entities like large banks and servicing companies are taking the homes of hard-working citizens and they do NOT own the mortgages or notes secured by that home. Yes, these homeowners owe the money to someone but that someone is NOT the actual owner of that Note. And, if I’m the homeowner, I’d like the opportunity to have a meaningful chance to work something out with the real owner. Because what happens in foreclosures is that the wrongful party gets the home in a foreclosure sale, puts it back on the market for sale and sells it for about 80-90% of its CURRENT VALUE! Now, why not keep that same homeowner in the house and let them pay 80-90% of it’s current value??? Heck, make it 100% of current value. Granted this won’t work 100% of the time but I’m betting at least 50% of the time and probably closer to 70% is realistic. We have large financial institutions wrongfully foreclosing, kicking people out of their flippin homes and flipping those homes to someone else for a bargain while the hard working homeowner goes down the block to rent another foreclosed home from an institution that wrongfully kicked that homeowner out most likely! What the heck is wrong with us folks? We gotta take stand on this. This is the definition of absurdity ten times over!

So, to bring this full circle in relation to the latest talk of Banks, Bailout and the 700 Billion to do it, I want to know exactly what our taxpayer dollars are actually going to buy? I think we have the right to know this. I want to make sure that the Federal Gov’t is going to buy actual Notes and yes, the originals, not some fraudulent copy. I don’t trust one of these banks… These guys have bilked billions out of us and after what I have seen in what they file, what they are alleging in these foreclosures, etc. I put nothing past them including purposefully “losing” notes so that they can sell them multiple times to multiple Trusts or investors. And now they’re whining for a bailout to the madness they’ve brought on us all. I can’t tell you how many people I’ve talked to that have tried desperately and in good faith to work something out with these thieves and they don’t even answer the phone! You wait on hold for 30 minutes to talk to someone half way around the world who tells you to fill out 10 pages of information, fax it in and someone will get back to you – which never happens!!!

Folks, knowledge of these facts and issues is what we all need to make sure we can and do hold our government and these politicians to some sort of order and accountability before we just bail out one more flippin company!

Hope this helps educate you on the real happenings in this big convoluted mess we’re all in. If nothing else, you can now impress your cohorts at the water cooler with some sophisiticated mortgage speak.

Lane Houk

“Had Enough? Am I the only guy in this country who’s fed up with what’s happening? Where the hell is our outrage? We should be screaming bloody murder. We’ve got a gang of clueless bozos steering our ship of state right over a cliff, we’ve got corporate gangsters stealing us blind, and we can’t even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, “Stay the course.” Stay the course? You’ve got to be kidding. This is America, not the damned Titanic. I’ll give you a sound bite: Throw the bums out! You might think I’m getting senile, that I’ve gone off my rocker, and maybe I have. But someone has to speak up. I hardly recognize this country anymore. The President of the United States is given a free pass to ignore the Constitution, tap our phones, and lead us to war on a pack of lies.Congress responds to record deficits by passing a huge tax cut for the wealthy (thanks, but I don’t need it). The most famous business leaders are not the innovators but the guys in handcuffs. While we’re fiddling in Iraq, the Middle East is burning and nobody seems to know what to do. And the press is waving pom-poms instead of asking hard questions. That’s not the promise of America my parents and yours traveled across the ocean for.

I’ve had enough. How about you? I’ll go a step further. You can’t call yourself a patriot if you’re not outraged. This is a fight I’m ready and willing to have. My friends tell me to calm down. They say, “Lee, you’re eighty-two years old. Leave the rage to the young people.” I’d love to, as soon as I can pry them away from their iPods for five seconds and get them to pay attention. I’m going to speak up because it’s my patriotic duty. I think people will listen to me. They say I have a reputation as a straight shooter. So I’ll tell you how I see it, and it’s not pretty, but at least it’s real. I’m hoping to strike a nerve in those young folks who say they don’t vote because they don’t trust politicians to represent their interests. Hey, America, wake up. These guys work for us. Who Are These Guys, Anyway? Why are we in this mess? How did we end up with this crowd in Washington? Well, we voted for them, or at least some of us did. But I’ll tell you what we didn’t do. We didn’t agree to suspend the Constitution. We didn’t agree to stop asking questions or demanding answers. Some of us are sick and tired of people who call free speech treason. Where I come from that’s a dictatorship, not a democracy. And don’t tell me it’s all the fault of right-wing Republicans or liberal Democrats. That’s an intellectually lazy argument, and it’s part of the reason we’re in this stew. We’re not just a nation of factions. We’re a people. We share common principles and ideals. And we rise and fall together.

Where are the voices of leaders who can inspire us to action and make us stand taller? What happened to the strong and resolute party of Lincoln? What happened to the courageous, populist party of FDR and Truman? There was a time in this country when the voices of great leaders lifted us up and made us want to do better. Where have all the leaders gone?

A Hell of a Mess.
So here’s where we stand. We’re immersed in a bloody war with no plan for winning and no plan for leaving. We’re running the biggest deficit in the history of the country. We’re losing the manufacturing edge to Asia, while our once-great companies are getting slaughtered by health care costs. Gas prices are skyrocketing, and nobody in power has a coherent energy policy. Our schools are in trouble. Our borders are like sieves. The middle class is being squeezed every which way. These are times that cry out for leadership.

But when you look around, you’ve got to ask: “Where have all the leaders gone?” Where are the curious, creative communicators? Where are the people of character, courage, conviction, competence, and common sense? I may be a sucker for alliteration, but I think you get the point.

Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo? We’ve spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened. Name me one leader who emerged from the crisis of Hurricane Katrina. Congress has yet to spend a single day evaluating the response to the hurricane, or demanding accountability for the decisions that were made in the crucial hours after the storm. Everyone’s hunkering down, fingers crossed, hoping it doesn’t happen again. Now, that’s just crazy. Storms happen. Deal with it. Make a plan. Figure out what you’re going to do the next time.

Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing. Who would have believed that there could ever be a time when “the Big Three” referred to Japanese car companies? How did this happen, and more important, what are we going to do about it? <!–[if !supportEmptyParas]–>Name me a government leader who can articulate a plan for paying down the debt, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry.

I have news for the gang in Congress. We didn’t elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity. What is everybody so afraid of? That some bobblehead on Fox News will call them a name? Give me a break. Why don’t you guys show some spine for a change? Had Enough? Hey, I’m not trying to be the voice of gloom and doom here. I’m trying to light a fire. I’m speaking out because I have hope. I believe in America. In my lifetime I’ve had the privilege of living through some of America’s greatest moments. I’ve also experienced some of our worst crises, the Great Depression, World War II, the Korean War, the Kennedy assassination, the Vietnam War, the 1970s oil crisis, and the struggles of recent years culminating with 9/11. If I’ve learned one thing, it’s this: You don’t get anywhere by standing on the sidelines waiting for somebody else to take action. Whether it’s building a better car or building a better future for our children, we all have a role to play. That’s the challenge I’m raising in this book. It’s a call to action for people who, like me, believe in America. It’s not too late, but it’s getting pretty close. So let’s shake off the horseshit and go to work. Let’s tell ‘em all we’ve had enough

Since the servicers, banks and investors thus far have failed to do anything logical in this housing mess, the idea of letting bankruptcy judges apply some logic and have the power to rework mortgages for homeowners who are stuck is a great idea.

Servicers are filing foreclosures as fast as they possibly can and cramming them through the various states at a sickening pace. Our civil court judges and clerks of the courts are participating in this massive scheme as well going as far as being publicly proud of their “rocket dockets” where 300-400 foreclosure cases are jammed through a 2-3 hour period. Shameful.

Shameful because 95%+ of all of these cases are filed fradulently. Shameful because judges are allowing institutions to take people’s homes without so much as raising an watchful eye to ensure that there is an ounce of integrity or truthfulness in the allegations lodged by the Plaintiff’s complaint.

So, here’s what happens… a servicer takes a home in foreclosure. The family is forcefully removed and forced to move into a different home (probably owned by another bank or even the same servicer). The institution sells the foreclosed home for about 80-90% of current value (although the FDIC predicts it’s about 70% of current value).

So let me give you a real live scenario of how illogical what they’re doing truly is: The family that was just removed owed $210,000 on the loan at a 7% interest rate. The home’s current value is $125,000. The bank will sell it for $105,000. The family could afford a mortgage of $150,000 at 5.5% interest rate. After closing costs, attorneys fees, etc. the bank/servicer will net about $95,000 on that home.

Do you see my point here? If you take into account the interest that the family would pay on the modified loan over the course of the next 5, 10 or 30 years. The modified loan is worth 2-3 times the $150,000. But no, the bank would rather create documents and paper trails to foreclose on the home, kick a family out of their home and take a massive loss on the sale of the foreclosure. All this when they could have logically modified the loan and turned a profit on the loan through a bona fide modification of the family’s loan.

This madness occurs thousands of times a day in our country and it’s high time that the government use some of the billions of taxpayer dollars to protect the taxpayer instead of greedy, corrupt institutions that have been the major cause of this housing meltdown.