MIAMI — The state of Florida made $63 million last year selling what many think is personal information.

Local 10 has learned the Department of Highway Safety and Motor Vehicles is selling people’s names, addresses, dates of birth, a list of the vehicles they drive, and it’s legal.

“Per federal mandate, there are companies that are entitled to this information. Insurance companies, for example, are entitled to this information. Employers are entitled to this information,” said Ann Howard of the Florida Department of Highway Safety and Motor Vehicles.

The state is currently selling this information to companies including Lexus Nexus and Shadow Soft. Those companies gather data on people and then sell that data. The companies must sign contracts with state claiming they won’t harass people…

Read more on how both the federal government and Florida screws the American people!

Enjoy!

Not being able to pay for goods outright, and then being hit by extortionate interest rates which spiral out of control, is the stuff of financial nightmares.

But new research has suggested this could actually be a dream scenario for many young adults.

It claims those saddling themselves with credit card debt will feel empowered and have better self-esteem.

Read more: http://www.dailymail.co.uk/sciencetech/article-2000681/Want-better-self-esteem-Saddle-mountains-credit-card-debt-new-study-claims.html#ixzz1POV8IJ16

These UK bankers have their brothers here in the U.S., and they would love for our youth to believe this drivel too!

Publius

Here is an excerpt of a great out outline of the fraud that the “bank bailout” was:

In summary, instead of doing everything in its power to stimulate reserve, and thus cash, accumulation at domestic (US) banks which would in turn encourage lending to US borrowers, the Fed has been conducting yet another stealthy foreign bank rescue operation, which rerouted $600 billion in capital from potential borrowers to insolvent foreign financial institutions in the past 7 months. QE2 was nothing more (or less) than another European bank rescue operation!

I read the original bill and warned family and friends.  Now we’re shocked to find the truth?

Oh my!

Read more with this phony bank bailout story link.

Publius

From the Boston Globe:

PORTLAND, Maine—The federal government Tuesday granted Maine a waiver of a key provision in President Barack Obama’s health care overhaul, citing the likelihood that enforcement could destabilize the state’s market for individual health insurance.

The U.S. Health and Human Services department said in a letter it would waive the requirement that insurers spend 80 cents to 85 cents of every premium dollar on medical care and quality improvement. Instead, the letter said, the state could maintain its 65 percent standard for three years, with the caveat that HHS intends to review the figures after two years.

The decision makes Maine the first state to receive a waiver of the requirement. Similar requests are pending from Kentucky, Nevada and New Hampshire.

What the @#$*& ??

Read more…

Well, it seems as JP Morgan just doesn’t own commodity positions on the trading boards.   They own the regulators too! Even more of a shock, no?

Speaking of changing the rules…

Gold and silver are now down hard over the past two days, and the reason may have something to do with the fact that the CFTC utterly caved to JPM in their long-awaited decision on position limits in a 4-1 vote.

While position limits will eventually be set, maybe, someday, the course of action taken by the CFTC grandfathers in JPM’s (and HSBC, et al.) current outlandish positions.

Chris Martenson explains this a little more at this JP Morgan Wins link.

You’re screwed if you don’t protect or hedge your currency, AND you are screwed if you DO hedge and buy gold or silver!

Uncle Sam has got you screwed coming and going!

What a country!

Publius

Comedian Chris Rock, when asked during the last presidential election if he was supporting Barack Obama because he is black, replied that he was supporting Obama because he was the only “one-millionaire” running for office. The other candidates were all multi-millionaires. While Obama probably appears further down the list, Rock’s point is well-made.The best Americans can do now is vote for the poorest millionaire.

Not really!

Read this report and open your eyes!

Net Worth of the 25 Richest Politicians

Enjoy!

Publius

Federal Reserve Notes

Federal Reserve Notes are printed and lent AT FACE VALUE PLUS INTEREST to the United States by the Federal Reserve System.

The United States Code reads:

Title31 § 5115. United States currency notes
How Current is This? (a) The Secretary of the Treasury may issue United States currency notes. The notes—
(1) are payable to bearer; and
(2) shall be in a form and in denominations of at least one dollar that the Secretary prescribes.
(b) The amount of United States currency notes outstanding and in circulation—
(1) may not be more than $300,000,000; and
(2) may not be held or used for a reserve.

So I ask you.  Why should we borrow Federal Reserve Notes AT INTEREST when we could print the necessary amount of “United States” currency for the cost of ink and paper?

We are so screwed, America!!

Publius

Murdered in plain site, in full view of the 300 million+ of its Citizens, the Republic, formerly known as the united States of America breathed its last breath.

Killed off by members of Congress who were sworn to uphold its Constitution, the Congress and their accomplice, Barak Hussein Obama conspired to rid its Citizens of their God given right to manage their private affairs such as medical health care.

As the reputed president of the former Republic, Barak Hussein Obama, in his own words did admit at George Mason University,  “And in just a few days, a century-long struggle will culminate in a historic vote“, the killing off of the former Republic was pre-meditated with a conspiracy lasting a hundred years.

The Democrats championing the health care bill, while the Republicans feigned an attack against it, proved much too strong for weary Republic that had been battling socialist tendencies for many years.

Socialism, like the cancer that it is, was hiding within the body of the Republic masquerading as other maladies, like “liberalism” and “progressive”, slowly tearing apart the very fabric of the American body.

The once proud American Republic, the shining light on the hill, the torch lighting the world to freedom, lives no more.

She is survived by formerly free Citizens who are to be cared for by the social utopia Congress from cradle to grave and all points in between.

No mention of a burial or funeral service.

Lady Liberty shines “freedom” no more to the world.  She will only mark the spot where the ghosts of liberty and justice  one lived.

May God have Mercy on us all!

Publius

Home > The "Repo 105" Scam: How Lehman Fooled Everyone (Including Allegedly Dick Fuld) And How Other Banks Are Likely Doing This Right Now

The "Repo 105" Scam: How Lehman Fooled Everyone (Including Allegedly Dick Fuld) And How Other Banks Are Likely Doing This Right Now

By Tyler Durden

Created 03/11/2010 – 17:53

Presenting a detailed look at "Repo 105" – the next soundbite sure to fill the airwaves over the next weeks and months, as more and more banks are uncovered to be using this borderline criminal accounting gimmick to make their leverage ratios look better. This is the first time we have heard this loophole abuse by a bank, be it defunct (Lehman) or existing (everyone else). There should be an immediate investigation into how many other banks are currently taking advantage of this artificial scheme to manipulate and misrepresent their cap ratio, and just why the New York Fed can claim it had no idea of this very critical component of the Shadow Economy.

From the report:

Lehman employed off?balance sheet devices, known within Lehman as “Repo 105” and “Repo 108” transactions, to temporarily remove securities inventory from its balance sheet, usually for a period of seven to ten days, and to create a materially misleading picture of the firm’s financial condition in late 2007 and 2008. Repo 105 transactions were nearly identical to standard repurchase and resale (“repo”) transactions that Lehman (and other investment banks) used to secure short?term financing, with a critical difference: Lehman accounted for Repo 105 transactions as “sales” as opposed to financing transactions based upon the overcollateralization or higher than normal haircut in a Repo 105 transaction. By recharacterizing the Repo 105 transaction as a “sale,” Lehman removed the inventory from its balance sheet.

Lehman regularly increased its use of Repo 105 transactions in the days prior to reporting periods to reduce its publicly reported net leverage and balance sheet. Lehman’s periodic reports did not disclose the cash borrowing from the Repo 105 transaction – i.e., although Lehman had in effect borrowed tens of billions of dollars in these transactions, Lehman did not disclose the known obligation to repay the debt. Lehman used the cash from the Repo 105 transaction to pay down other liabilities, thereby reducing both the total liabilities and the total assets reported on its balance sheet and lowering its leverage ratios. Thus, Lehman’s Repo 105 practice consisted of a two?step process: (1) undertaking Repo 105 transactions followed by (2) the use of Repo 105 cash borrowings to pay down liabilities, thereby reducing leverage. A few days after the new quarter began, Lehman would borrow the necessary funds to repay the cash borrowing plus interest, repurchase the securities, and restore the assets to its balance sheet.

Lehman never publicly disclosed its use of Repo 105 transactions, its accounting treatment for these transactions, the considerable escalation of its total Repo 105 usage in late 2007 and into 2008, or the material impact these  transactions had on the firm’s publicly reported net leverage ratio. According to former Global Financial Controller Martin Kelly, a careful review of Lehman’s Forms 10?K and 10?Q would not reveal Lehman’s use of Repo 105 transactions. Lehman failed to disclose its Repo 105 practice even though Kelly believed “that the only purpose or motive for the transactions was reduction in balance sheet;” felt that “there was no substance to the transactions;” and expressed concerns with Lehman’s Repo 105 program to two consecutive Lehman Chief Financial Officers – Erin Callan and Ian Lowitt – advising them that the lack of economic substance to Repo 105 transactions meant “reputational risk” to Lehman if the firm’s use of the transactions became known to the public. In addition to its material omissions, Lehman affirmatively misrepresented in its financial statements that the firm treated all repo transactions as financing transactions – i.e., not sales – for financial reporting purposes.

And here is the Fed punchline, as it once again implicates Tim Geithner:

From 2003 to 2009, Treasury Secretary Timothy Geithner served as President of the Federal Reserve Bank of New York (“FRBNY”). The Examiner described to Secretary Geithner how Lehman used Repo 105 transactions to remove  approximately $50 billion of liquid assets from the balance sheet at quarter?end in 2008 and explained that this practice reduced Lehman’s net leverage. Secretary Geithner “did not recall being aware of” Lehman’s Repo 105 program, but stated: “If this had been a bank we were supervising, that [i.e., Lehman’s Repo 105 program] would have been a huge issue for the New York Fed.”

And even though the Fed should have been fully aware of any shadow transaction be they "matched book" repos or the "105 variety, nobody had any clue. Just who the hell was regulating banks???

Jan Voigts, who was an Examining Officer in FRBNY’s Bank Supervision Department, had no knowledge of Lehman removing assets from its balance sheet at or near quarter?end via a repo trade treated as a true sale under a United Kingdom opinion letter.

Arthur Angulo, who was a Senior Vice President in FRBNY’s Bank Supervision department, likewise was unaware that Lehman engaged in repo transactions at quarter?end, under a United Kingdom true sale opinion letter, where the assets would be returned to Lehman’s balance sheet following the end of the reporting period. Angulo said that the described repo transactions appeared to go “beyond other types of [permissible] balance sheet management." Angulo also said that he would have wanted to know about off?market transactions where Lehman accepted a higher haircutthan a repo seller normally would accept for a certain type of collateral.

Thomas Baxter, FRBNY General Counsel, had no knowledge of Repo 105 transactions, either by name or design. Baxter was generally aware of firms using quarter?end and month?end “balance sheet window?dressing,” but did not recall this being an issue linked to Lehman specifically.

Stunningly, nobody at the SEC was aware of Lehman’s Repo 105 program. And guess what: NEITHER DID DICK FULD. This is unbelievable – the criminality reaches to the very top, yet the very top denies all knowledge.

Richard Fuld, Lehman’s former Chief Executive Officer denied any recollection of Lehman’s use of Repo 105 transactions. Fuld said he had no knowledge that Lehman treated any kind of repo transaction as a true sale or that Lehman ever removed from its balance sheet assets transferred in a repo transaction. In addition, Fuld did not recall having seen any reports referencing the amount of the firm’s Repo 105 activity. Fuld further stated that he did not know that Lehman removed approximately $49 and $50 billion in inventory off its balance sheet at quarter?end
through the use of Repo 105 transactions in first quarter 2008 and second quarter 2008, respectively. Fuld said, however, that if he had learned that Lehman was temporarily cleansing its balance sheet of assets at quarter?end through Repo 105 transactions, it would have concerned him.

Alas it seem Fuld is blatantly lying:

Fuld’s denial of recollection must be weighed by a trier of fact against other evidence. Fuld recalled having many conversations with his executives about reducing net leverage and emphasized to the Examiner how important it was for Lehman to reduce its net leverage. The night before the March 28, 2008 Executive Committee meeting, Fuld received materials for the meeting, including an agenda of topics including “Repo 105/108” and “Delever v Derisk” and a presentation that referenced Lehman’s quarter?end Repo 105 usage for first quarter 2008 – $49.1 billion.  The
materials also were forwarded by Fuld’s assistant to other Lehman executives. It appears that Fuld did not attend the March 28 meeting, but Bart McDade recalled having specific discussions with Fuld about Lehman’s Repo 105 usage in June 2008. Sometime that month, McDade spoke to Fuld about reducing Lehman’s use of Repo 105 transactions. McDade walked Fuld through the Balance Sheet and Key Disclosures document (reproduced in part below) and discussed with Fuld Lehman’s quarter?end Repo 105 usage – $38.6 billion at year?end 2007; $49.1 billion at first quarter 2008; and $50.3 billion at second quarter 2008.

[1]

Based upon their conversation, McDade understood that “Fuld knew, at a basic level, that Repo 105 was used in the firm’s bond business” and that Fuld “was familiar with the term Repo 105.”3524 McDade recalled that when he advised Fuld in June 2008 that Lehman should reduce its Repo 105 usage to $25 billion, “Fuld understood that this would put pressure on traders.”3525 McDade also recalled that “Fuld knew about the accounting of Repo 105."

Combing through the Appendix on what collateral was actually "sold" (only to be promptly bought back) in Repo 105s:

Most securities Lehman used in Repo 105 transactions were “governmental” in nature, implying a certain level of liquidity. While representing a relatively small percentage of Lehman’s total Repo 105 assets/securities, at times the nominal amount of non?”governmental” securities Lehman used in Repo 105 transactions was quite large. For example, as of February 29, 2008 (the end of Lehman’s first quarter 2008), Lehman utilized over $1 billion of highly structured securities, i.e., CLOs and CDOs, private RMBS, CMBS and asset?backed securities, in Repo 105 transactions. In the market environment that existed for Lehman in early 2008, these structured securities were likely relatively illiquid as indicated by declines in origination volumes, wider bid?offer spreads, and higher margin requirements.

[2]

In August 2008, just before it was over, the firm allowed $55 million, or seven securities, rated CCC to be included in a Repo 105 transaction.

[3]

The next chart makes it evident it that 105s were used simply to game the firm’s assets into quarter end (yellow highlights), by reducing overall asset for leverage ratio calculations.

[4]

That this scam was going unsupervised (just who the hell were the counterparties?) for many years, and that many banks are likely using it right now to fool investors, regulators, rating agencies, and the idiots at the FRBNY (who certainly also know about this), is beyond criminal. Yet that nobody will go to jail for this is as certain as the market going up another 10% tomorrow. A full investigation has to be conducted immediately into whether existing Wall Street firms, and in particular those who use Ernst & Young as auditors, are currently abusing public confidence via such transactions.

It appears Bank of America is intentionally failing to collect on the portion of its mortgage portfolio that is back by Uncle Sam.  Screwed again, America!

I have long suspected that it was only a matter of time before banks began to adjust their Collection efforts to reflect Government Guarantees on their loan portfolios.

Simply put, imagine you are a bank with $100 billion in loans. Of this, $20 Billion is guaranteed by the government, $80 billion is your own money. If you managed the collection organization responsible for servicing this debt wouldn’t you be just a wee bit tempted to make sure that your $80 billion was getting the priority?

The table below details the past 12 quarters of Total Loans for Bank of America along with the portion that is Noncurrent:

The Noncurrent percentage has jumped from 5.30% in Q3 to 6.75% in Q4. Quarter on Quarter there is another $12.44 Billion in Noncurrent loans.

The next table details the same 12 quarters and reviews what portion of the Noncurrent loans are guaranteed by the Government (er, you and me the taxpayer):

Bank of America has had a massive jump in the Noncurrent loans that are Government Guaranteed. The Quarter on Quarter jump is… wait for it… $11.40 Billion.

So, magically, the incremental $12.44 Billion that has become Noncurrent Quarter on Quarter at Bank of America has a guarantee on $11.40 Billion. Nearly 92% of the jump in their Noncurrent loans are covered by us, the taxpayer.

This is no conspiracy theory discussion – these are cold hard facts supporting what any reasonable actor would do in the situation. If the government is going to cover my losses on a portion of my loan portfolio I can damn well guarantee you I’d be moving my best collectors to the portfolio I’m responsible for. The government can have my new hires, my undesirables, my slow workers, etc…

I highly doubt that we’ll ever hear about this, but this is yet another massive shift from the taxpayer to the bank!

Screwed Again!

Publius