Cyprus Parliament Narrowly Votes To Accept Bailout

Amid all the stuff going on closer to home, this mess in Cyprus still bears watching:

Cyprus moved a step closer on Tuesday to receiving much-needed aid when its parliament narrowly endorsed a bailout deal drafted amid unprecedented acrimony and calls for the island to exit the eurozone.

In a nail-biting ballot, following hours of heated debate, Nicosia's 56-member House approved the €10bn rescue package with a majority of two votes. Among officials who had warned of a "chaotic default" the result was met with visible relief.

...

Highlighting the furore that the agreement has unleashed, however, the deal was wholeheartedly rejected by the island's anti-austerity opposition parties, Akel and Edek. Several lawmakers predicted that its impact on a country that until recently was better known for its robust offshore financial services, would be "far worse" than the devastating invasion it suffered at the hands of an invading Turkish army in 1974.

With the EU-IMF sponsored rescue programme forcing the government to dismantle the banking sector – and forcing depositors, for the first time, to foot the cost of recapitalising banks exposed to debt-stricken Greece – many MPs have virulently denounced the package as containing the seeds of the country's economic destruction.

Indicative of the concerns that the measure might not be passed, the beleaguered president of Cyprus, Nicos Anastasiades, issued a last-minute appeal calling on politicians to think of the island's "greater good".

With bankruptcy looming, the governing coalition warned of "chaotic scenes", with public sector salaries and pensions going unpaid if the programme was voted down.

"Our country is passing through a critical time that calls for a sense of national responsibility and conduct in a manner which is consistent with the greater good," said Anastasiades, a British-trained barrister who assumed power barely two months ago.

In a replay of the scenes that have haunted Greece, protesters demonstrated outside parliament as the vote took place. Many hurled abuse at politicians now widely blamed for the island's economic decline. The Cypriot economy, once one of the most vibrant in the EU, is set to contract by 13% over the next year.

The prospect of the island being pushed into prolonged recession has given way to mounting speculation that perhaps it would be better if it left the eurozone altogether. In the runup to the vote, Akel ratcheted up the pressure by calling for a referendum on the issue.

"We know leaving the euro is an equally painful option, but reinstating a national currency could offer prospects for growth in the future," the party's general secretary, Andros Kyprianou, said.
Increasingly, the island's business elite has embraced the idea that the country would fare better if it dumped the single currency and returned to the Cyprus pound.

Calls for the island to leave the bloc have mounted as the knowledge has also sunk in that the price of international rescue funds will now be €13bn in budget cuts.

Maybe Randi Weingarten can issue a meaningless and useless call for the end to austerity measures?

First It's A Template, Then It Isn't

Been on the road for a few days, but just came home to this news:

Fears that bank accounts could be raided in any future eurozone bailouts spooked markets on Monday, as Cypriots prepared for some of their banks to reopen for the first time in 10 days following a deal to secure a €10bn lifeline.

Markets took fright after the head of the group of eurozone finance ministers indicated that the Cyprus rescue could be a template for similar situations. Cyprus is the first of five bailouts in the eurozone where depositors have been hit.

"What we've done last night is what I call pushing back the risks," Jeroen Dijsselbloem, the Dutch finance minister, told Reuters and the Financial Times after clinching an agreement for Cyprus. "If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders," he said.

Bank of Cyprus and Laiki, the two largest domestic banks, will remain shut until Thursday while the latter is split into a good and bad bank and a levy – of potentially 40% – is imposed on accounts of more than €100,000.

A big percentage of those deposits belong to Russians. On Monday the Russian president, Vladimir Putin, said there would be a deal to rework the terms of a €2.5bn loan to the Mediterranean island, which had become attractive for its low tax regime and lax vetting laws.

Cyprus president Nicos Anastasiades made a televised address in which he admitted that measures would be in place to stop money pouring out of the banks when they reopen. "The central bank will implement capital controls on transactions. I want to assure you that this will be a very temporary measure that will gradually be relaxed," he said.

Markets were initially buoyed by news of the "painful" bailout for Cyprus, clinched late on Sunday night following threats by the European Central Bank to switch off liquidity to Cypriot banks, which, carried by international deposits, had grown to eight times the €17bn economy.

But markets reacted badly later in the day after Dijsselbloem's remarks. As markets tumbled, he issued a clarification insisting that bailout programmes were "tailor-made" and that "no models or templates are used".

 Love it - the markets react well at the news of a "painful" bailout deal for Cyprus, but then when they discover accounts over $130,000 may be subject to a 40% "tax" and that deal serves as a template for future bank bailouts, the markets plunge.

Until the Eurogroup reassures that this is not a template for future bailouts at all, people should ignore what they had said just a few hours before.

In the dictionary under full of shit, I saw a picture of Jeroen Dijsselbloem.

Well, it's great to see that accounts under $130,000 weren't touched, but the remarks made by Jeroen Dijsselbloem really caused chaos today:

The good news for the eurozone was that the markets reacted well to the bailout deal for Cyprus. The bad news was that the rally lasted barely until lunchtime. By then investors were running scared at the prospect that the terms imposed on one of the single currency's smaller members would be the template for rescue packages for bigger countries.

Credit for the change of mood goes to Jeroen Dijsselbloem, who chairs meetings of eurozone finance ministers and who decided it would be a good idea to go public with the idea that Cyprus was not such a special case after all.

For the past week the message has gone out that there are no comparisons between a country that allowed itself to become the tax haven of choice for high-rolling Russians and other, better-managed, members of the eurozone.

Then, in a couple of interviews, Dijsselbloem said Cyprus would be used as the model for future bailouts.

The comments were an open invitation to any investor with more than €100,000 in a eurozone bank to remove it without delay, which some then did.

By the end of the day shares in Europe were tumbling, the euro was dropping against the dollar and the cost of insuring European banks against default was rising, forcing Dijsselbloem to issue a clarification of his earlier remarks. Confirming that European politicians could not organise a booze-up in a brewery, Cyprus was back to being a special case once again.

Very much business as usual, in other words. Confusion reigns as the eurozone stumbles from crisis to crisis, with the markets already bracing themselves for the next bailout.

 What a mess - a disaster waiting to happen in the near future.

Cyprus Update

Not good:

Cyprus ordered its banks to remain closed until next week as the cabinet held emergency talks on Wednesday in an effort to strike a deal with the EU or Russia to avert financial meltdown and stave off bankruptcy.

After the country's parliament rejected a plan to provide €5.8bn (£5bn) by seizing a portion of bank deposits from anyone with a bank account, Cyprus is struggling to come up with a plan that will let it access an EU bailout to stop its banks failing.

The country's eurozone partners and the International Monetary Fund (IMF) are ready to provide €10bn in an emergency bailout if Cyprus comes up with an extra €7bn itself. Most of the bailout money is needed to shore up the country's oversized banking sector, with the rest for government finances.

No clear "plan B" had emerged after meetings between politicians and representatives of European partners and the IMF. The Cypriot cabinet was said to be discussing ideas including the nationalisation of pension funds of semi-government corporations, which hold €2bn-€3bn, and another form of levy on deposits.

Another option debated may have been natural gas bonds linked to hydrocarbon reserves discovered off Cyprus, which remain uncertain and will not be exported until at least 2019.

The nationalization of the pension plans will not be accepted:

International creditors were set to reject an alternative bailout plan Cyprus cobbled together a day after the government's divisive tax on bank deposits died a quick death, two officials with knowledge of the situation said on Wednesday.

Experts from the troika—the European Commission, the European Central Bank and the International Monetary Fund—were briefed Wednesday on Nicosia's Plan B to secure a €10 billion ($12.93 billion) bailout after Parliament resoundingly rejected the deposit-levy plan attached to the original agreement.

Cypriot authorities proposed turning pension-fund assets into government bonds in a bid to raise about €4.2 billion of the €5.8 billion the deposit tax would have raised.
But troika officials weren't convinced this would be a viable option, the officials said. While the plan would bring money into state coffers, it would be in the form of debt, making the country's already heavy load unsustainable, they said.

 On it goes...

Cyprus Banks Closed Until Thursday

Because everything is under control, you see:

BERLIN — European fears of renewed economic crisis flared Monday as officials took the unprecedented step of targeting bank deposits in Cyprus to pay part of the price tag of a bailout for the troubled island nation.

The proposal to tax all bank deposits, which must be approved by Cyprus’s parliament, sparked a bank run on the tiny nation and raised questions about whether a precedent was being set that could expose other European deposits in future bailouts. Amid turmoil in the country and uncertain parliamentary support, Cypriot leaders delayed a vote on the proposal until Tuesday and shuttered banks until Thursday to avoid further deposit losses. Finance officials from the 17-nation euro zone were scheduled to confer by telephone Monday to discuss the situation.

The Guardian reports the Cypriot government will not hold the bailout vote tomorrow, as there are not enough votes right now to pass it:

The Greek TV station Antenna is reporting that Cyprus president Nicos Anastasiades was planing to tell the Eurogroup tonight that he doesn't have enough support to get the bailout deal approved by parliament.

That won't come as a shock to anyone - especially with his own coalition partner, DIKO, demanding changes (see 7.17pm).

Eurozone finance ministers were due to start holding a videoconference call to discuss Cyprus an hour ago. No news flashes yet....

The videoconference call among Eurozone ministers is now over. Here are the headlines:

Eurogroup gives Cyprus 'leeway' over savings tax

Breaking: Eurozone finance ministers have ended their video conference call on the Cyprus crisis.
And the big news is that the Eurogroup have apparently agreed to give Cyprus more flexibility on its bank levy. As long as it hits the €5.8bn target. And it appears that tomorrow's vote in parliament still goes ahead.
That's according to a source in the Greek finance minister, interviewed by Reuters.
Here are the latest snaps off the Reuters terminal:
• EUROGROUP MEETING ON CYPRUS OVER, EUROGROUP GIVES CYPRUS MORE FLEXIBILITY ON BANK LEVY - GREEK FINMIN SOURCE
• EUROGROUP TO SAY THAT CYPRUS SHOULD SAFEGUARD PROTECTION OF DEPOSITORS BELOW 100,000 EUROS - GREEK FINMIN SOURCE
• CYPRUS PARLIAMENTARY VOTE ON BANK LEVY TO TAKE PLACE ON TUESDAY, AS PLANNED - GREEK FIN MIN SOURCE
• CYPRUS SHOULD STILL RAISE 5.8 BILLION EUROS FROM THE BANK LEVY AS PLANNED - GREEK FINANCE MINISTRY SOURCE

And The Guardian posted a note from JP Morgan Chase analysts on the meaning of all of this:

JP Morgan: material risks from Cyprus

Analysts at JP Morgan have just published a new research note, warning that the financial markets have underestimated the risks posed by Cyprus.
They suggest that investors could be wrong to think the current deadlock over the bailout will be resolved, or that the eurozone's long-term "crisis management framework" remains intact.
With Cyprus, the rest of the eurozone, and Moscow all at odds over the plan, the near-term risks are 'material', JP Morgan warned.
Cyprus's fundamental problem, the bank says, is that it is "politically impossible to impose the extent of losses on insured depositors [those with less than €100,000 in the bank] that the weekend agreement envisaged".
This leaves Cyprus with three options, none very pleasant:

Option A could be to recalibrate the pain so that insured depositors do not need to pay anything, while uninsured depositors pay around 15.4% of their deposits.

The difficulty (and the main reason why this approach was not tried initially) is that the burden would fall disproportionately on
Russian institutions and individuals. Russian influence is Cyprus is considerable; and statements from President Putin indicate that he would be extremely hostile to such an approach. There is some possibility that Russia would respond to a larger haircut by refusing to roll its existing €2.5bn loan to Cyprus; meaning that this option would still leave a significant shortfall. In such a scenario, either the haircut on uninsured deposits would need to be around 21.8%, or further Troika funding would need to be found.

Option B could be to go straight to requesting additional support from the Troika.

The Eurogroup is holding a further conference call this evening, which is likely to investigate the near-term implications of the Cypriot agreement. In our view, a significant amendment of the terms of the deals (which calls for €5.8bn to be found from deposit haircuts) is unlikely.
Politically, it could be very difficult for Germany in particular to make any kind of U-turn (especially since part of the purpose of the whole exercise has been to demonstrate the Government's hard-line to domestic voters). The Eurogroup could propose looking at different parts of the capital structure, but this could risk compounding the existing error by creating additional uncertainties. Finance Ministers may look for other
forms of funding, but their task looks difficult (it is possible that Cyprus will revisit the idea of securitising future gas revenues, which we were surprised was not utilised in the initial proposal).

Option C could be to tweak the current pain distribution so that less of the burden falls on the insureds.

The Government has already proposed staggering the burden so that depositors with less than ?100,000 pay 3%,those with less than €500,000 pay 10% and those with more than €500,000 pay 15%. To our mind, this looks like shifting deckchairs.

And in the long term... JP Morgan argues that the "breach of faith between Euro area policymakers and regional depositors" will remain.

They're trying their best to undo the damage the initial agreement did.

Even if they're able to do that (and that's still a big if), having already let the "bail in" cat out of the bag and tried to stick mom and pop depositors with some of the bank bail out bill will not be forgotten for a long, long time.

You can bet the next time some banks in Spain, Italy, Portugal or France need bailing out, people will run to the exits with all the cash they can get out of those banks no matter what the ECB, EC and IMF says to try and reassure them.

That's what JP Morgan Chase means when they say the "breach of faith between Euro area policymakers and regional depositors" will remain long term.

The Faces Of Class Warfare

Wall Street CEO's, of course:

Incredulous that Wall Street investment bankers and billionaire CEOs have descended on Washington in the midst of ongoing budget talks to tell Americans that they should "lower their expectations" when it comes to the security of their retirement and future health care, Vermont Senator Bernie Sanders took to the Senate floor Thursday to call out the audacity of corporate-minded millionaires and billionaires, calling them the new "face of class warfare" in the United States.

"I find it literally beyond comprehension, that we have folks from Wall Street who received huge bailouts from the people of our country—from working families in this country—because of the greed and recklessness and illegal behavior, which Wall Street did to drive us into this recession, and now these very same people are coming here to Congress to lecture us and the American people about how we have to cut Social Security, Medicare, and Medicaid while they enjoy huge salaries and retirement benefits."

Sanders specifically called out CEO of Goldman Sachs, Lloyd Blankfein, who has recently been making both the media rounds and consulting with lawmakers regarding the ongoing tax and budget debate in Washington during the current lame duck session. Blankfein, one of the highest paid executives on Wall Street and worth hundred of millions personally, made the comments about 'lowered expectations' in a recent evening news interview with CBS and said that average Americans should understand that the US simply can't "afford" to maintain programs like Social Security and Medicare.

The facts of such sentiments, as many economists repeatedly point out, are false, but Sanders said that Blankfein delivered the familiar rightwing trope "with all the sympathy for someone struggling to get by on $14,000-a-year retirement that you’d expect from a Wall Street banker paid $16 million last year."

The chutzpah of Blankfein, whose firm Goldman Sachs directly benefited from the AIG bailout, is large but not surprising.

There is an arrogance to many of these corporate types, especially the CEO's and the hedge fundies, that they're smarter than everybody else, they're harder working than everybody else, and they deserve more than everybody else.

The reality is, the system is rigged in their favor and many of them are ethically-challenged anyway so even if it wasn't rigged in their favor they would steal their way to the top.

Witness Goldman where they sold worthless CDO's to their own clients, knowing those CDO's were worthless, than shorted the very same so that they could make money coming and going.

Why would anybody in government listen to a criminal like Lloyd Blankdfein?

Unfortunately it is because he is rich and he, along with the rest of the 1%, own those guys.

What is good for Lloyd Blankfein is bad for the rest of the country - but that won;t stop the geniuses in charge from giving him what he wants.

Student Loan Debt Bomb

Three fair jobs reports have the Obama people doing high fives over the economy.

No high fives here, however:

Bankruptcy lawyers have a frightening message for America: They’re seeing the telltale signs of a student loan debt bubble that is placing increased financial pressure on families struggling with their children’s mounting debt. According to a recent survey by the National Association of Consumer Bankruptcy Attorneys, more than 80 percent of bankruptcy lawyers have seen a substantial increase in the number of clients seeking relief from student loans in recent years.

In most cases, those clients could not meet the federal hardship standards that are necessary to discharge a student loan through bankruptcy proceedings. Instead, many of these parents or guardians who co-signed the student loans face the prospect of losing their life savings, cars or homes to collection agencies for aggressive private lenders.

...

The amount of student borrowing skyrocketed from $100 billion in 2010 to $867 billion last year — or more than the $704 billion in outstanding U.S. credit card debt, according to the Federal Reserve Bank of New York. Of the 37 million borrowers who have outstanding student loan balances as of third-quarter 2011, 14.4 percent have at least one past-due student loan account. Together, these balances come to $85 billion, or roughly 10 percent of the total outstanding student loan balance.

College seniors who graduated with student loans individually owed an average of $25,250, up 5 percent from the previous year, according to a study by Brewer’s group. Parents are responsible, on average, for $34,000 in student loans, a figure that rises to about $50,000 over a standard 10-year repayment period. An estimated 17 percent of parents whose children graduated in 2010 took out loans, a 5.6 percent increase from 1992 and 1993.

A report last year by the Pew Research Center and the Chronicle of Higher Education warned that public anxiety over college costs is at an all-time high. Moreover, “low income college graduates or those burdened by student loan debt are questioning the value of their degrees,” saying the cost of college has delayed other life decisions, the report said.

But of course the people at the USDOE and the NYCDOE are going to begin tracking both schools and individual teachers on college attendance and readiness, so the point of whether college is good or not for individual students right out of high school is moot.

College For All is good for the bankers - and that's what matters these days

Until people start going belly-up on their students loans.

Not to worry, though - there's a government bailout waiting at the end of the line for the banksters.

As for the Millenium Generation, there's a shackle and chain waiting to be tied around their legs for the rest of their lives as they consistently have to go back to college to be "re-trained" for the latest technology advances and compete for employment in an economy that is increasingly rigged against them:

Stef Gray, a Hunter College graduate from New York who has paid $300 in forbearance fees to the company since May, organized the petition drive in hopes of persuading Sallie Mae to drop the fee, just as Bank of America and other financial institutions dropped unpopular fees in the face of Internet protests.

Gray, 23, who lives in Brooklyn, has become a symbol of the plight of young Americans saddled with debt. With both her parents deceased, Gray has put herself through school with part-time jobs and three private loans with Sallie Mae.

Since graduating in May with a master’s degree in geographic information systems, Gray has been unable to find full-time employment. Instead, she says, she has gotten by with temporary jobs and waitressing. Without a steady income, she says, it has been impossible to make the $700 monthly payments on her $40,000 in loans. Nor has she been able to consolidate the loans or negotiate more favorable terms with Sallie Mae.

Every time she deferred a payment on the three loans, Sallie Mae slapped her with a $50 forbearance fee for each loan — a total of $150.

“That may not sound like a lot of money to some,” she said. “But for me, with no parents, struggling to get by without a job and not receiving any unemployment, that’s a lot of money.” Because of the compounding effect of the interest rate on the unpaid portion of her loan and related penalties, Gray says, her original $40,000 loan has grown to $65,000. “The interest is snowballing,” she said.

Morning in Obama's America.

Going to be one bad day for a long time to come...

Why Is The Federal Reserve Funneling Money To Libya?

Wait, I thought we were dropping freedom bombs on Libya?

Turns out we're also dropping lots of no-interest loans at the same time.

More change we can all believe in.

Oh, no wait - it's not, is it?

Citigroup's Pandit Belongs In Jail

Another day, another allegation of wrongdoing by one of the Masters of the Universe:

Outspoken bank analyst Michael Mayo turned up the heat on a long-simmering dustup between himself and Citigroup's top brass.

In a one-page research note yesterday, Mayo accused Citi CEO Vikram Pandit of breaking Wall Street securities law only months after taking the helm of the bank in early 2008.

Mayo's accusations center on recently unearthed records that show that the Office of the Comptroller of the Currency sent a letter to Citi on Feb. 14, 2008, informing the bank that the regulator harbored serious concerns about its internal risk controls.

Despite the letter, Pandit signed documents vouching for the integrity of the firm's internal controls and its public filings just days later.

According to Sarbanes-Oxley rules, both Pandit and Citi's chief financial officer at the time, Gary Crittenden, are required to sign off on Citi's publicly released financial records.

Merely eight months later, Citi accepted a $20 billion lifeline from Uncle Sam, which included a government agreement to guarantee $300 billion in dicey mortgage securities.

"The failure to highlight any disagreements or concerns on valuations and controls by Citi's primary regulator seems to us like a breach of Sarbanes-Oxley requirements to formally vouch for the company's financials," Mayo wrote.

In a statement Citi said its actions were "appropriate" at the time.

"Citi maintains rigorous disclosure controls and procedures to support its CEO and CFO certifications," said Citi spokeswoman Shannon Bell.

"These controls and procedures were followed in connection with the filing of the 10K in February 2008, and Citi's certifications were entirely appropriate," the spokeswoman added.

The three-year-old OCC report has come to light after the Financial Crisis Inquiry Commission recently released a 545-page report and reams of documents obtained as a part of its year-long investigation into the roots of the financial crisis.

Mayo told The Post that the new revelation raises questions about Citi's current risk management practices.

"We've got ongoing concerns about Citi's risk management," he said.

Is Pandit in jail?

Nope - he's getting a raise:

Four of Citigroup’s top executives will receive a total of nearly $12m in cash if the bank’s core operations earn a total of $12bn over the next two years, in a profit-sharing scheme that has raised eyebrows among some corporate governance experts.

John Havens, Citi’s second-in-command below the chief executive Vikram Pandit, stands to earn at least $5.2m, if Citi hits the profit target, while Manuel Medina-Mora, the head of the bank’s consumer unit and of its Latin America operations, could earn $2.7m. Alberto Verme, chief executive of Citi’s operations in Europe, the Middle East and Africa, is in line for a $2.3m pay-out while John Gerspach, the finance chief, could get $1.7m.

The payments will be tied to the performance of Citicorp, the group’s core operations, and exclude the earnings or losses recorded by Citi Holdings, the unit that houses non-core assets and businesses to be divested.

The awards are part of US banks’ drive to tie more of their executives’ compensation to long-term performance as regulators push Wall Street to reform its pay structures. The Citi executives will receive two-thirds of their awards in January 2013, with the rest payable a year later.

Silly, RBE, expecting accountability for a Master of the Universe.

Maybe if Pandit were a teacher...

Arlo Guthrie Takes on Bailouts

Fantastic song about bailouts from a live album made by Arlo Guthrie and Pete Seeger:





And here's an update Arlo did about Fannie Mae:




Nothing ever really changes, does it?

Contagion

The banksters have already gotten bailouts in the United States, Greece and Ireland. It must be Christmas season, because there are more bailouts to come:

LONDON (MarketWatch) — The euro zone’s sovereign-debt crisis intensified Tuesday, with yields on Spanish, Italian and other peripheral government bonds soaring in the wake of a weekend meeting of European Union finance ministers that failed to soothe fears of the potential for future defaults.

The yield on 10-year Spanish government bonds jumped to around 5.63%, strategists said, a day after surging to 5.43%.

The move sent the yield premium demanded by investors to hold 10-year Spanish debt over comparable German bunds to more than three full percentage points.

Bond yields move in the opposite direction of bond prices.

“Ireland’s bailout did nothing to ease the euro-zone debt crisis: it might have even made it worse,” said Steven Barrow, currency and fixed-income strategist at Standard Bank. “For now the market sees a pattern emerging and the next piece of the bailout puzzle seems to be Portugal, with Spain to follow after that.”

How exciting! More free money for banskters, more pain for the populace.

Until we take the banskters and the hedge fund criminals and the others who continue to steal the money and pass along the pain into jail, this stuff will not stop.

The Banksters Eat Ireland

Krugman's column:

The Irish story began with a genuine economic miracle. But eventually this gave way to a speculative frenzy driven by runaway banks and real estate developers, all in a cozy relationship with leading politicians. The frenzy was financed with huge borrowing on the part of Irish banks, largely from banks in other European nations.

Then the bubble burst, and those banks faced huge losses. You might have expected those who lent money to the banks to share in the losses. After all, they were consenting adults, and if they failed to understand the risks they were taking that was nobody’s fault but their own. But, no, the Irish government stepped in to guarantee the banks’ debt, turning private losses into public obligations.

Before the bank bust, Ireland had little public debt. But with taxpayers suddenly on the hook for gigantic bank losses, even as revenues plunged, the nation’s creditworthiness was put in doubt. So Ireland tried to reassure the markets with a harsh program of spending cuts.

Step back for a minute and think about that. These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts.

Or to be more accurate, they’re bearing a burden much larger than the debt — because those spending cuts have caused a severe recession so that in addition to taking on the banks’ debts, the Irish are suffering from plunging incomes and high unemployment.

But there is no alternative, say the serious people: all of this is necessary to restore confidence.

Strange to say, however, confidence is not improving. On the contrary: investors have noticed that all those austerity measures are depressing the Irish economy — and are fleeing Irish debt because of that economic weakness.

Accountability is for the little people, not the banskters.

Pain is also for the little people, not the banksters.

Until we start imposing accountability and pain on the banksters themselves. they're going to keep doing this.

Bail Out The Post Office Using Big Bank Money

I love this idea!

Almost daily, I receive at least one pre-approved credit card offer from a big national bank that received bailout money from U.S. taxpayers. I hate big banks, and I hate bailouts, and I really hate it when my bailout money is used to send me junk mail I didn't ask for and don't want.

Actually, this junk mail may just be what's keeping the U.S. Postal Service afloat -- if by floating you mean not yet completely submerged in red ink. The USPS lost $3.5 billion in the third quarter compared with $2.4 billion in the same period last year -- a 46% increase.

Hefty Bank Profits

Meanwhile, the bailed-out banks are reporting hefty profits financed by taxpayer largesse (JPMorgan Chase (JPM): $4.8 billion; Citigroup (C): $2.7 billion; Bank of America (BAC): $3.1 billion for the most recent quarter). We kept them afloat in their hour of need -- in a crisis at least partly, if not largely, of their own creation. Isn't it time for the banks to pay it forward?

How about a special tax on the big banks to help keep the Postal Service and the vital work it does going -- and to preserve the jobs and benefits of its employees. The struggling economy doesn't need any of the 623,000 postal workers dumped into this increasingly job-free labor market.

Here's the best part: We don't need Congress or the president to enact such a tax.

A Grassroots Bailout

Instead, a grassroots bailout -- this time, of the post office. This time, paid for by the bailed-out banks. We can do it. Here's how: From now on, don't just throw out those credit card offers. Instead, put the paperwork in the "postage will be paid by addressee" envelope (first removing anything with your name on it) and drop it back in the mailbox. You've just transferred the cost of mailing that letter from the not-so-needy Chase/Citi/Bank of America to the oh-so-needy USPS. Who needs Robin Hood when we have postage-paid envelopes?

The U.S. has 307 million people. If each person received an average of just one credit card offer a month (most adults get more than that, while children get none) and mailed it back to the bank without a signed application, at a cost to the bank of 44 cents postage, U.S. consumers could transfer $135 million a month from the banks to the Postal Service.

There's no red tape, no lobbyists to pay off, and no congressional hearings to schedule. Tweet this post (#grassrootsbailout) or share it on Facebook to get started. The employees of the USPS are counting on you.

I've got a couple of those pre-approved offers sitting around right now.

Going to make the post office some money tomorrow!

What a great idea!

BTW, was checking out Zac Bissonnette's book Debt Free U tonight at Borders. I'm going to buy it tomorrow using teachers choice money and use this for my two college prep classes. Great stuff!

Where's The Accountability On The Mortgage/Foreclosure Crisis?

President Accountability has vowed to hold teachers accountable like nobody else ever has.

Fair enough.

But as a teacher, I have decided to turn the tables and hold HIM accountable like few have.

Yesterday I looked at the economic mess we currently have with unemployment wavering between 9.5%-10%, underemployment at almost 19%, GDP for Q2 now expected to be revised down to 1.2% or lower, and jobless claims rising while economic activity is falling.

For an administration that vowed to have unemployment down to 8% and the economy revving by 2010, this record they have on the economy seems like a MISERABLE failure.

Yet rather than take any of the blame upon himself, or God forbid, actually change course and do something DIFFERENT (i.e., not listen to the two buffoons who got us here - Larry Summers and Treasury Timmeh Geithner), he has doubled down on the failed strategies, blamed Bush for the continuing mess (even though he's been gone for almost two years) and when that hasn't worked, blamed teachers and schools for the economic crisis.

Today I would like to take a look at the housing foreclosure/mortgage crisis and see how he is performing there.

Here's the latest news on foreclosures:

If you're waiting for relief on the foreclosure front, keep waiting. RealtyTrac says foreclosure notices rose 4% last month, the 17th straight month filings have exceeded 300,000. And RealtyTrac's Rick Sharga tells MarketWatch News Break that foreclosures may not peak until 2011.

Foreclosures not peaking until 2011.

Foreclosures exceeding 300,000 for 17 straight months.

Hmm - that would be the entire time President Accountability has been in office.

300,000 multiplied by 17...let's see, that would equal 5,100,000 foreclosures in the time President Accountability has been in office.

Now how long has the Obama mortgage relief program been in action and how has it been faring?

Well, the plan was unveiled in March of 2009 by President Accountability himself:

PHOENIX — Seeking to tackle “a crisis unlike any we’ve ever known,” President Barack Obama unveiled an ambitious $75 billion plan Wednesday to keep as many as 9 million Americans from losing their homes to foreclosure.

Announcing the plan in Arizona — a state especially hard hit by the housing crunch — Obama said that turning around the battered economy requires stemming the continuing tide of foreclosures. The housing crisis that began last year set many other factors in motion and helped lead to the current, widening recession.

“In the end, all of us are paying a price for this home mortgage crisis,” Obama said at a high school outside Phoenix. “And all of us will pay an even steeper price if we allow this crisis to deepen.”

...

Obama’s plan aims to keep between 7 million and 9 million people from foreclosure. Of the nearly 52 million U.S. homeowners with a mortgage, about 13.8 million, or nearly 27 percent, owe more on their mortgage than their house is now worth, according to Moody’s Economy.com.

Headlining Obama’s plan is a $75 billion Homeowner Stability Initiative, which would provide a set of incentives to mortgage lenders in an effort to convince them to help up to 4 million borrowers on the verge of foreclosure. The goal: cut monthly mortgage payments to sustainable levels, defined as no more than 31 percent of a homeowners income. Funding would come from the $700 billion financial industry bailout passed by Congress last fall.

Another key component would specifically help those said to be “under water” — with dwellings whose market value have sunk below the principal still owed on the mortgages. Such mortgages have traditionally been almost impossible to refinance. But the White House said its program will help 4 million to 5 million families do just that — if their mortgages are owned or guaranteed by Fannie Mae or Freddie Mac.

OK, that was the plan. Announced in March, help 7 to 9 million people to stave off foreclosure. Sounds good.

Now how has it fared?

President Obama's plan to help the 11 million Americans whose homes are underwater isn't working, according to a new report that will be released tomorrow on Capitol Hill by the Congressional Oversight Panel. The plan called for banks to adjust mortgages for homeowners paying more for their homes than they're worth, but most aren't receiving the help they requested. Legislators are already demanding that the big banks to do more, but today, four of the nation's largest banks pushed back.

Citigroup, Bank of America, Wells Fargo, and JP Morgan questioned why they should reduce mortgages for those in over their heads. A JP Morgan representative pointed to the pricetag, saying it would cost $900 billion to help every underwater homeowner.

Middle class advocates say the banks could afford to help more Americans, whose tax dollars helped save the financial industry during the economic collapse. Advocates say no one is asking the banks to adjust every mortgage, and so far, evidence shows that banks haven't adjusted many mortgages at all.

Of the more than 1.1 million homeowners who signed up for mortgage help through the president's adjustment plan, only 170,000 have had their mortgages permanently adjusted. Experts say that's a dismal performance.

Gee - it's not working at all, is it? Just 170,000 mortgages permanently adjusted out of the 1.1 million who signed up for the program.

That's not a very good record at all.

But what happened to those who signed up for the Obama program but ultimately got no relief?

President Barack Obama's signature plan to combat the housing crisis has fallen short of its goals -- rather than significantly and permanently reducing home foreclosures, it is only delaying them.

The administration unveiled its Making Home Affordable plan in February 2009. Obama vowed in front of an audience gathered at Dobson High School in Mesa, Ariz., that MHA's signature effort, the Home Affordable Modification Program, would "enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure."

The $75 billion initiative -- $50 billion from the bank bailout, $25 billion from government-owned mortgage giants Fannie Mae and Freddie Mac -- was designed to induce lenders, servicers and investors to modify distressed mortgages through a series of cash incentives.

It's not working.

In its first year, 1.5 million people were invited to try HAMP. About 40 percent of those who tried it have been kicked out of the program; fewer than that have been given an actual shot at keeping their homes.

When President Obama took office, it took an average of 319 days to complete a foreclosure, according to Jacksonville, Fla.-based data provider Lender Processing Services. Now it takes 461 days.

Extending the process by which homes enter foreclosure allows banks to continue carrying the loans on their books at full value, delaying loss recognition. That allows unhealthy banks to appear healthy, staving off costly bank failures.

Oh, so it helps out the banks but not the homeowners!

I got it now.

Just another Change We Can Believe In Obama program that is corporate-friendly and corporate-approved.

But still I want to know what HAPPENS to those who enter the program, get their mortgages extended for a while but then wind up being foreclosed upon anyway?

A Year Into HAMP, 'We're Losing Our Home'

Bea and Terry Garwood applied to JPMorgan Chase for HAMP help in April 2009 and were approved for a "trial" modification that July because they met the core requirements: their house payments took up more than 31 percent of their monthly pre-tax income; they lived in their home; they owed less than $729,000; and they were at risk of default. Garwood says the HAMP trial reduced their monthly payment on their two-story home in Pinckney, Mich., by nearly $500 to about $1,175 -- a huge relief, she adds.

A HAMP trial is supposed to become "permanent" after three months, but Garwood's dragged on for nine. "They kept on saying a bank statement was missing, or one of the documentations wasn't signed, or they didn't have the affidavit, or the hardship letter," Garwood says. "And then on March 19, I received a letter saying, 'You do not qualify for a permanent modification. You now owe us $12,000.'"

Chase rejected the Garwoods for two reasons, according to the letter Garwood received: The bank claimed their monthly mortgage payment amounted to less than 31 percent of their income and they failed HAMP's opaque "Net Present Value" test, a complex Treasury Department formula that servicers use to determine if a modification will make investors more money than a foreclosure. Garwood says that Chase assumed they had an inflated income by looking at deposits to their bank account and ignoring the money paid out to the people who work for her husband, a roofing subcontractor. If Chase went by the Garwoods' tax forms, she claims, the bank would realize they make thousands of dollars less every month and the couple would qualify for a permanent modification. Chase declined to comment.

Garwood says that the difference between their reduced payments during the trial period and what they would have paid otherwise, plus late fees, is $12,000. She says they can't possibly afford it all at once but that they would have found a way to make full monthly payments if they hadn't been lured into HAMP. They stopped making payments in April, shortly after they were turned down for a permanent modification. Sheriff's sales have been set for June, July, and now August. Garwood says she thinks she may be able to continue to dodge the foreclosure for a little while longer, but she's not exactly grateful for the extra time.

"They told us we were a great candidate, so we went for it," she says. "And as a result we're losing our home."

Wow - so those folks might have actually kept their home had they NOT entered into the Obama administration's HAMP program, but since they did and since the program is so badly devised and badly run, they are LOSING their home instead.

This is an absolutely ABYSMAL record on fixing the foreclosure problem.

The Obama administration would have been better DOING NOTHING than starting the HAMP program and other administration efforts that have made matters WORSE for homeowners, though they certainly helped out the banks, especially the ones with lots of bad mortgages on their books.

Perhaps that was the point of the program in the first place?

In any case, on both the economy (unemployment, GDP) and the foreclosure problem, the Obama administration and President Accountability have been MISERABLE failures.

And yet, no accountability for the accountability-meisters in the accountability administration.

Just more jive, more lies, more excuses and of course more threats sent the way of teachers.

But accountability is coming soon.

Oh yes it is.

And if the GOP nominates somebody moderately sane in 2012 like Pawlenty, Romney or even Huckabee, President Accountability is going to be voted out of a job and be sent back to the ranch in Crawford to pick brush with Bush.

It's Only Teachers Who Are Accountable

The financial system nearly collapsed last year because people in the financial industry at "Too Big To Fail" institutions like AIG, Citigroup, Bank of America, Goldman Sachs and others took too much risk and needed to be bailed out by hundreds of billions of taxpayer dollars.

Many of those same people are being rewarded with seven and eight figure bonuses this year.

The financial policy makers who helped create this mess - like Ben Bernanke who voted yes on every Greenspan "moral hazard" policy decision and who has been printing money hand over fist to give to the "Too Big To Fail" institutions and Treasury Timmeh Geithner who oversaw the AIG bailout wherein he handed AIG counterparties 100 cents to the dollar on money owed to them for toxic assets they themselves had bought that were worth at best 20 cents and who asked one of those counterparties, Goldman Sachs, to keep this deal secret from the investigators at the SEC - continue to cheerfully make financial policy.

In fact, Obama renominated Bernanke for another four years and the administration said last week that Geithner has the full confidence of the president.

On December 25, 2009, a Nigerian man set his penis on fire trying to blow up a plane over Detroit. The man's father had warned the State Department that he had become radicalized and was a danger to the United States. In addition, the CIA knew he visited radical elements in Yemen and was a danger to the United States. Nonetheless the man bought a one way ticket with cash and bordered a plane in Nigeria without any luggage and flew to the United States with a visa that said he was coming for a "religious ceremony" (a jihadi euphemism for martyrdom.) The attack was only averted because passengers on the plane noticed his crotch was on fire and held him down until the plane landed.

Two days after the incident, Director of Homeland Security Janet Napolitano said "The system worked..." when talking about the incident. Widely ridiculed for that statement, the administration forced her to walk that back the next day when she said "The system actually didn't work..." and Obama himself said there had been systemic failures throughout the intelligence apparatus that kept the Feds from stopping this man before he got on the plane to Detroit.

Nonetheless, Obama said he was not going to be part of a blame game and point fingers at anybody, so nobody was fired, nobody was held accountable for any of this.

Essentially Obama said "Mistakes were made" and left it that.

Now compare the way Obama has treated the "Too Big To Fail" institutions, the people at those institutions who are pulling in seven and eight figure bonuses for 2009, the policymakers who helped create the mess and the people in his government who missed the very obvious signs of a incoming terrorist attack and then afterward brushed aside criticism by saying "The system worked..." with the way he treats teachers and schools that he considers "failing."

You work in a school that used to be a "good school" but had hundreds of ELL's, support service students and other at-risk students dropped on it in the last few years from other schools that were closed, but have received no extra resources to handle the new students - too bad, Obama says your school needs to be closed down, the teachers need to be fired and a non-unionized charter should be opened in its place. Remember, it's only the test scores that matter.

You work in a school that has few resources, an overpopulated building, overcrowded classrooms, and bathrooms being used to hold math classes in because a charter school has been placed on the first and second floors of your building - too bad, Obama says your school needs to be closed down, the teachers need to be fired and a non-unionized charter should be opened in its place. Remember, it's only the test scores that matter.

You're teaching students who come from impoverished families with generations of dysfunctional behavior, mental illness, alcoholism and other addictions, students themselves who are in great emotional pain and act out that pain through angry outbursts in school or by simply never coming to class and you don't have any way to reach them - too bad, it's your fault they're that way and Obama says you're school needs to be closed down, the teachers need to be fired and a non-unionized charter should be opened in its place. Remember, it's only the test scores that matter.

In Obama's America, like in Bush's America, nobody is accountable for anything except for the teachers and the public education system.

Everybody else, including the president who gave himself a B+ for his first year in office (record deficit, 10% unemployment, hundreds of billions in giveaways to the "Too Big To Fail" firms, no major legislation passed, health care reform turned into major giveaway for the health insurance industry, reneged promises on Card Check legislation and DaDT) gets a pass, a "Heckuva job, Janet" pat on the back, or an eight figure bonus for taking the economic system to the point of collpase and needing billions in bailout dollars and continued access to Federal Reserve 0% interest-free loans to survive.

I cannot wait to hold President Accountability accountable come November 2010 and November 2012.

It's time everybody hold President Accountability accountable for not holding all these other crooks and incompetents accountable.

Treasury Timmeh Shills For Financial Firms

From Huffingtonpost:

An arm of the Federal Reserve, then led by now-Treasury Secretary Timothy Geithner, told bailed-out insurance giant AIG to withhold key details from the public about overpayments that put billions of extra tax dollars in the coffers of major Wall Street firms, most notably Goldman Sachs.

Read the rest of the piece. Treasury Timmeh Geithner made sure AIG's counterparties got 100 cents on the dollar even when they were willing to take a lot less, then wanted to make sure those sweetheart deals were kept secret.

It's clear Geithner must resign from Treasury and President Obama must explain what he knew about Geithner's dealings during the period between November 21, 2008 when Geithner was picked to succeed Hank Paulson at Treasury and Geithner's Senate confirmation on January 26, 2009.

Reports about the 100 cents on the dollar sweetheart deals engineered by Geithner for Goldman, Merrill, et al. weren't made public until March but may have been circulated behind the scenes before that.

At the very least, President Accountability should have asked his pick for the Treasury Department just how he handled the AIG bail-out and why.

So tell us, Mr. President: What did you ask Geithner about his doings in the bailout mess before you picked him to run Treasury, what did you learn about his doings during the AIG bailout and when did you learn that Geithner ensured Goldman, Merrill, et al. would get secret100 cents to the dollar sweetheart deals at taxpayer expense?

The answers better be good, Mr. President.

There are a lot of angry people out there watching you give away the store to Wall Street and the Too Big To Fail firms while you raise taxes on middle and working class Americans.