Daily Digest

Daily Digest 10/21 - Banks Resuming Foreclosure Proceedings, iDepression 2.0, China Minerals Embargo Widens

Thursday, October 21, 2010, 9:45 AM
  • Europe Is Turning Its Back on Keynes’s Cure for Recession
  • Largest Bank Will Resume Foreclosure Push in 23 States
  • iDepression 2.0
  • Why The Paperwork Appears "Sloppy"
  • U.S. Housing Market Foreclosure-gate Doomsday Revolution Erupts
  • China Just Banned Export Of Rare Earth Metals To The U.S.
  • China Said to Widen Its Embargo of Minerals
  • AAPL and Oil and 7.5% Levels, Oh My

Follow our steps to prepare for a world after peak oil, such as how to store & filter water

Economy

Europe Is Turning Its Back on Keynes’s Cure for Recession (jdargis)

In Britain, George Osborne, chancellor of the Exchequer, delivered a speech on Wednesday that would have made Keynes — who himself worked in the British Treasury — blanch.

Largest Bank Will Resume Foreclosure Push in 23 States (jdargis)

Bank of America, the nation’s largest bank and the servicer of roughly one in five American mortgages, insisted that it had not found a single example where a foreclosure proceeding was brought in error.

The move is also likely to encourage other giant lenders, like JPMorgan Chase, to resume the foreclosure process that threatens two million homeowners.

iDepression 2.0 (JimQ)

A little reality about the job situation in this country is in order. The unemployment rate reported by the Bureau of Labor Statistics and parroted by the mainstream media is currently 9.6%. Once you stop counting people who have given up looking for jobs and “left the workforce”, discouraged workers, marginally attached workers and workers forced to work part-time, you magically get a 9.6% rate. Using the method of measuring unemployment used during the Great Depression and reproduced by www.shadowstats.com, the real unemployment rate is a depression-like 22.5%.

Why The Paperwork Appears "Sloppy" (hucklejohn)

So the reason why the paperwork is all out of order is that there was no paperwork. There only entries on databases and spreadsheets. The loans were not in actuality assigned to any one particular trust or any one particular bond or any one particular individual or group of investors. They were “allocated” as receivables multiple times to multiple parties usually to an extent in excess of the nominal receivable itself. This is why the servicers keep paying on loans that are being declared in default. The essential component of every loan that was never revealed to either the lenders (investors) nor the borrowers (homeowner/investors) was the addition of co-obligors and terms that neither the investor nor the borrower knew anything about. The “insurance” and other enhancements were actually cover for the intermediaries who had no money at risk in the loans, but for the potential liability for defrauding the lenders and borrowers.

U.S. Housing Market Foreclosure-gate Doomsday Revolution Erupts

Foreclosures can only be done by the note-holder, who has the legal standing to show up in court and ask the judge to foreclose and evict. In about half the states, they have to bring the ORIGINAL (not a photocopy or electronic version) document with "wet signature", so the judge can see the actual ink on paper. They have to prove the chain of title and that they own the note they intend to foreclose on.

Energy

China Just Banned Export Of Rare Earth Metals To The U.S. (Fred H.)

This action -- which China has not admitted -- could represent economic blackmail for numerous economic complaints, including pressure to revalue the yuan and to cut unfair subsidies for Chinese clean tech. China had already said it would reduce rare earth exports by 72 percent for the second half of the year.

China Said to Widen Its Embargo of Minerals (Rector)

The Chinese action, involving rare earth minerals that are crucial to manufacturing many advanced products, seems certain to further intensify already rising trade and currency tensions with the West. Until recently, China typically sought quick and quiet accommodations on trade issues. But the interruption in rare earth supplies is the latest sign from Beijing that Chinese leaders are willing to use their growing economic muscle.

AAPL and Oil and 7.5% Levels, Oh My (Ilene)

China is likely to raise rates today, making a small concession to the US on their exchange rates but more so to cool off the massive property bubble that is forming in their cities. That may put some downward pressure on commodities without strengthening the dollar - an interesting combo, but one that illustrates how China is becoming more important in the Global marketplace than the US.

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

7 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
Re: Daily Digest 10/21 - Banks Resuming Foreclosure ...

"California's now-resolved $19 billion budget shortfall got plenty of attention in recent months, but a state report released Wednesday highlights the state's other massive deficit - in the unemployment insurance fund, which will be $10.3 billion in the hole by year's end.

The report by the nonpartisan Legislative Analyst's Office warns of dire consequences if California's leaders do not tackle the fund's insolvency: The federal government could impose steep taxes on California businesses beginning in 2012, and the state could lose $400 million in federal dollars annually.

The deficit is the result of the state paying out more in unemployment benefits than it collects. The shortfall is offset by federal loans, but the state must begin paying interest on those loans next year.

The report warns that the only way for the crisis to be resolved without drastic change, such as tax increases, is for the state's unemployment rate to drop to 4 percent - a near impossibility."

............1A) California's jobless benefits fund faces $20 billion deficit

"WASHINGTON (MarketWatch) -- The Federal Housing Finance Agency on Thursday released projections of the financial performance of Fannie Mae and Freddie Mac and estimated they could draw between $221 billion to $363 billion from the government under the preferred stock purchase agreements. To date, the firms have drawn $148 billion. The projected credit losses in each scenario primarily reflect possible further losses on the enterprises' pre-conservatorship mortgage business."

  • Other news, headlines and opinion:

New York Fed Faces `Inherent Conflict' in Mortgage Buybacks

`Savage' Austerity Is in US's Future, Buiter Says: Tom Keene

PM Putin set to approve $59 bln Russian asset sale

Japan's Toxic Cocktail Fails US Taste Test: Caroline Baum

China's Economic Growth Cools as Inflation Accelerates

Moody's Downgrades Another $1.1 Billion Of RMBS

Spain Sells EU3.85 Billion of Bonds as Demand Falls at Auction

Catalonia Sells Debt to Citizens After Public Market Lockout: Euro Credit

Subprime-Mortgage Market Re-Opens With Investec Issue

Philippine Budget Deficit Widens In September

San Jose council committee moves to block bonus retirement payments (Pension fund has $2 billion projected shortfall)

Bankruptcy support heats city hearing (Harrisburg)

CMBS unpaid balances reach $62.19 billion, CRE CDO delinquencies up

Unpaid state bills shift burden to local governments (NY)

NC's budget shortfall on the rise?

Cash-strapped governments ramping up tax-collection efforts (Washington region)

Sanford says SC pension fund in trouble

Americans Growing More Pessimistic About Economy: CNBC Survey

Nokia to cut 1,800 jobs after strong Q3

Jobless claims drop, monetary stimulus seen

Fears for 100000 jobs as Osborne slices £3bn from Scottish budget

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2237
Re: Daily Digest 10/21 - Banks Resuming Foreclosure ...

Saxplayer, you kick butt and take no names!!:)  Nice job!

dbworld's picture
dbworld
Status: Member (Offline)
Joined: Sep 14 2009
Posts: 10
Re: Daily Digest 10/21 - Banks Resuming Foreclosure ...

+1. Saxplayer, I always scan for good articles in CM daily digest AND the first comment!!

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2219
The daily dose of surreality

I am on a break at work.  We have no computers there so I check e-mail etc. at the local library.  I am here reading stories on CM.com and so forth (ZeroHedge, automatic earth, et al.).  The woman at the computer next to me is shopping for shoes.  The woman 2 computers down is on FaceBook.  The dude to her left is downloading coupons.

Clearly we haven't gotten too close to that "aha" moment -- at least not in Briarcliff Manor, NY...

Then again, one of my clients this week confided that her hubby had bought gold -- in bar form (he's a trader at one of the big firms so his purchases have a couple more 0's on the end of them I guess <smile>).  That was a first.

And that's the report from Westchester County....

Viva -- Sager

Johnny Oxygen's picture
Johnny Oxygen
Status: Diamond Member (Offline)
Joined: Sep 9 2009
Posts: 1443
Re: Daily Digest 10/21 - Banks Resuming Foreclosure ...

U.S. Housing Market Foreclosure-gate Doomsday Revolution Erupts

Oh man. I didn't get credit for my submission. Wink

Good read though. 55% in some state of foreclosure in the west! Holy Cats!

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest 10/21 - Banks Resuming Foreclosure ...

“Almost anything is better than paper money ... any fool can run a printing press.”

These are not the words of a modern-day gold bug, but attributed to Nelson Bunker Hunt, the billionaire oil baron who went long on silver in the 1970s. So long, in fact, that he and his brother cornered the market, were sanctioned by the regulator for market manipulation and went bankrupt in the process.

After their move, the price of silver hit a peak of $50 an ounce in 1980 before dropping to $10 the following year.

In the past month silver has bounced back to prices not seen since the Hunt brothers’ day. No single investor is cornering the market but, just as in the 1970s, the price is being driven by surging speculative demand as investors sweep up supplies of the grey precious metal whose primary use is industrial.

Investors in silver, also known as “poor man’s gold”, are persuaded by many of the same arguments that have driven the gold price higher: the prospect of a global “currency war” in which central banks race to devalue their currencies to support domestic growth and the belief that a second round of emergency monetary easing by the Federal Reserve could eventually lead to a sharp jump in inflation.

Gold has captured the headlines, ticking off one new record high after another, but volatility in bullion is near a five-year low, which for some investors makes it a less exciting prospect. Returns on silver, they say, could be greater.

Indeed, there are symptoms of spreading silver fever. Sales of silver coins are set to hit a record high this year, while investors have snapped up more than 1,500 tonnes of silver through exchange-traded funds (ETFs) in the past two months alone. That is more than 5 per cent of total annual silver supplies.

Michael Kramer, president at Manfra, Tordella & Brookes, a large US coin dealership, says: “Silver coins are doing very well.”

David Madge, director of bullion sales at the Royal Canadian Mint, says it has already sold in excess of 30 per cent more of its popular silver Maple Leaf coin than last year’s record 10m ounces. The US Mint has sold 27.5m ounces of silver American Eagles so far this year – already within reach of last year’s record 28.8m ounces with the busy Christmas period still to come.

The interest in ETFs, coins and futures has helped to drive prices higher. Silver is one of the best-performing commodities this year. In the past two months it has rallied 31 percent – to $23.72 an ounce on Wednesday – more than three times gold’s 8.9 percent rise.

The price rises, in turn have prompted a response from the main silver mints. The US Mint this month raised the premium above the value of the metal content that it charges dealers buying silver American Eagles. The Canadian mint has run out of 2010-dated silver Maple Leaf coins, although Mr. Madge says it would produce more if needed.

Analysts and investors, though, are divided on the outlook for the metal. Some see silver as having brighter prospects than bullion. The reason for this is that, unlike gold, for which investment is now the biggest single source of demand, silver consumption is still largely accounted for by its traditional end-uses in the production of jewellery and in the electronics industry and photography. In theory, this should mean that, as the world economy recovers, silver will benefit from an extra shot in the arm and outperform gold, says Daniel Brebner, commodities analyst at Deutsche Bank in London.

Matthew Turner, analyst at Mitsubishi, the Japanese trading house, says: “There are two drivers for silver: industrial demand and gold. The two drivers are both positive at the moment.”

Traders and refiners have reported a strong rebound in industrial demand for silver. Solar power, which uses silver-containing chemicals to convert sunlight into electricity, is a source of new demand. Traditional consumers in the electronics industry are also bouncing back strongly, refiners say.

the rest is here http://www.cnbc.com/id/39777069

jhart5's picture
jhart5
Status: Bronze Member (Offline)
Joined: Jul 25 2009
Posts: 89
Re: Daily Digest 10/21 - Banks Resuming Foreclosure ...

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