No, Americans Are Not All To Blame for the Financial Crisis: Exposing the big lie of the post-crash economy

 

mong my favorite anecdotes of the mortgage-industry decadence that preceded the global financial crisis is the one about Ameriquest’s wind machine. A motivational tool for managers, it made its appearance in the late ’90s at an executive conference at Las Vegas’s MGM Grand Hotel, where the future subprime leader hooked up a powerful fan to a plastic tent. Inside, exuberant branch managers jumped around amid a cascade of cash, allowed to keep as many swirling bills as they could grab.

That was how it went at mortgage-firm retreats: Here, a money-grabbing contest; there, a round of ritual chanting—“The power of yes! The power of yes!”—at a 2004 Washington Mutual gathering that was like the high ceremony of some bizarre money cult. Before long such incentivizing was part of the daily…

Fed Staff Suddenly Saw U.S. Economy in 2008 Needing Low Rate Era

Federal Reserve economists warned in December 2008 that five years could pass before growth revived enough to warrant raising interest rates from near zero, as the magnitude of the economic meltdown dawned on Fed officials.

The warnings, part of preparatory documents for policy meetings in 2008 released by the Fed yesterday, highlight the sudden alarm among central bank staff as the economy began to plunge in the worst downturn in seven decades. Six weeks earlier, the economists had predicted a contraction of no more than 1 percent and said the Fed could restore growth by lowering the main rate to 0.5 percent before tightening in 2010.

By the time of the Dec. 15-16 meeting, Fed staff warned that the central bank would simply be unable to “provide enough stimulus to generate a robust recovery with a relatively quick…

In a case originally filed in California State Court, a Plaintiff brought a civil rights action against Facebook for alleged First and Fourteenth Amendment violations.  The Defendant removed the case to Federal Court.  Young v. Facebook, Inc., 2010 U.S. Dist. LEXIS 98261, at *1-2 (N.D. Cal. Sept. 13, 2010).

The Plaintiff sought a preservation order against the Defendants.  Young, at *2.

Judge Fogel summarized general preservation obligations in Federal Court, according to 9th Circuit precedent:

Parties to a civil action in federal court are under a duty to preserve evidence that they know is relevant or reasonably could lead to the discovery of admissible evidence. Leon v. IDX Sys. Corp., 464 F.3d 951, 959 (9th Cir. 2006). This obligation, backed by the court’s power to impose sanctions for the destruction of such evidence, is sufficient in most cases to secure the preservation of relevant evidence. Before additional measures to preserve evidence are implemented…

Ex-Dewey Executives Charged in Fraud That Destroyed Firm

Three former executives at Dewey & LeBoeuf LLP, once the No. 3 legal adviser to banks handling merger deals, were charged with a “blatant” $200 million fraud that spurred the largest law firm bankruptcy in history.

The three, including the chairman, executive director and chief financial officer, were accused of using accounting gimmicks similar to those that sent top executives at WorldCom Inc. and Tyco International Ltd. to prison a decade ago. Authorities cited e-mails in which the men referred to “fake income,” “cooking the books” and “accounting tricks.”

“Fraud is not an acceptable accounting practice,” ManhattanDistrict Attorney Cyrus R. Vance Jr. said today in announcing the charges. “The defendants are accused of concocting and overseeing a massive effort to cook the books” that “contributed to the collapse of a prestigious international law firm.”

UK prosecutor says has “vast amounts” of documents in Libor case

(Reuters) – British fraud prosecutors have sifted through “vast amounts” of documents in their case against three former Barclays traders alleged to have rigged crucial Libor benchmark interest rates over a two year period, a London court heard on Tuesday.

James Hines, a senior lawyer for Britain’s Serious Fraud Office (SFO), told a short hearing at Southwark Crown Court that much of the evidence against Peter Johnson, 59, Jonathan Mathew, 33, and Stylianos Contogoulas, 42, was in email form.

The three men, who are next expected to appear in court towards the end of July, bring to 13 the number facing criminal charges in Britain and the U.S. over allegations that they attempted to manipulate the London Interbank Offered Rate (Libor), a central cog in global financial markets against which about $450 trillion of financial products are pegged, from…

Renting Judges for Secret Rulings

NEW HAVEN — SHOULD wealthy litigants be able to rent state judges and courthouses to decide cases in private and keep the results secret?

The answer should be an easy no, but if the judges of Delaware’s Chancery Court persuade the United States Supreme Court to take their case and reverse lower federal court rulings outlawing that practice, corporations will, in Delaware, be able to do just that.

The state has long been a magnet for corporate litigation because of its welcoming tax structures and the court’s business expertise. Yet the State Legislature became concerned that Delaware was losing its “pre-eminence” in corporate litigation to a growing market in private dispute resolution.

To compete, Delaware passed a law in 2009 offering new privileges to well-heeled businesses. If litigants had at least $1 million at stake and were willing to pay $12,000 in filing fees and…

Attorney: CA Supreme Court ruling could help families in foreclosure

ROSEVILLE, Calif. (KCRA) —With an estimated 1.3 million California homeowners in foreclosure, a Roseville attorney says the state Supreme Court has made a decision that could ultimately keep many from losing their homes.

“This is nothing less than a huge victory for homeowners because this provides them with the legal leverage that they have when they are trying to attempt to get some recourse from their bank,” attorney Stephen Foondos said.

Foondos said a Fresno homeowner fought foreclosure in court and won in the case known as Glask v. Bank of America. In the case, the homeowner claimed the financial institution trying to take his home didn’t have the right to because the loan was improperly transferred to a securities trust.

“This trust never owned anything and therefore didn’t have the right to foreclose on Mr. Glaski, which now means…

JPMorgan Chase Class-Action Settlement Is Approved

A federal judge approved a settlement Friday of a class-action lawsuit against JPMorgan Chase for its force-placed insurance practices, an agreement that could pay more than $300 million to about 750,000 mortgage borrowers.

The national settlement prohibits the bank for six years from getting commissions, kickbacks or reinsurance from the insurance, which it obtains when a homeowner’s policy lapses.

Under U.S. District Judge Federico Moreno’s order in Miami, class members will have to file claim forms to recover 12.5 percent of the net premiums they were charged between Jan. 1, 2008, and Oct. 4, 2013. Moreno also barred JPMorgan Chase and Assurant and its insurance subsidiaries “from inflating premiums” for six years.