We found significant deficiencies that represent not only unsafe and unsound practices, but a breakdown in way customers are treated...
That was the statement made by acting Comptroller of the Currency John Walsh in regards to the Consent Order directed at the nation's sixteen largest banks, issued by his and other regulatory agencies yesterday.
Initial reaction was that the ruling was more a wrist-slapping by the regulators, but Walsh came out in its defense, as did others, such as FDIC's Sheila Bair.
The order includes provisions for the banks to undertake a complete review of their foreclosure practices and rectify any errors that may have affected consumers negatively. Additionally, the banks are instructed to pursue a “comprehensive, independent review” of their foreclosures from 2009 and 2010, institute a system for a single contact person for each foreclosure or mortgage modification action. The agencies - which include the Federal Reserve and the Office of Thrift Supervision - will closely monitor the banks' progress, look more closely at their practices and determine appropriate fines for each firm.
These actions, apart from the voluminous litigation already begun and sure to follow, plus the conclusion of 50 state attorneys general is likely to cost the banks a good deal of time, effort and money. When all is said and done, revealing their openly fraudulent practices and procedures will have two major effects: 1) they will not be so prone to play fast and loose with mortgage money, and 2) housing loans will become even more difficult to get.
On the surface these outcomes may be more of a detriment to recovery in the housing market, but homes will at least become more affordable. Making it difficult to qualify for a loan, the cost of residential housing will fall accordingly until some balance is achieved in the market. After that, homeowners can begin going after tax assessments and "fair value" assessments which are now likely more than 40% too high in many hard-impacted communities.
While the process will be riddled with starts and stops, the long-range outcome should be more affordable housing for lower and middle class people, without onerous tax implications. we may be turning a corner after all.
One other note of interest in terms of bank-hating worldwide was Senator Carl Levin's well-directed attack on Goldman Sachs today:
The Senator says he wants the Justice Department and the Securities and Exchange Commission to examine whether Goldman Sachs violated the law by misleading clients who bought collateralized debt obligations without knowing the firm was betting they would fall in value.
Levin believes that not only did Goldman Sachs' executives delude their clients and break their fiduciary trust, but also lied to congress when brought in front of the Financial Inquiry panel.
Heck, as our link confirms, even FoxNews is pushing this agenda forward, but it remains to be seen if Attorney General Eric Holder will come out of hiding and actually pursue prosecution. If not, maybe it's time to indict the AG himself, because Levin and other members of congress have rightly identified Goldman Sachs and their brethren in the "big banking" world as the criminals who caused the financial meltdown of 2008 and sank the economy.
Watch Senator Levin tear into Goldman Sachs' Daniel Sparks:
Wall Street's reaction to this background noise was all-too-typical behavior by the very same banks that have grown in size over the past 2 1/2 years: they turned a perfectly plausible market downturn into marginal gains. The Dow was down 107 points before the pimps and pumpers jacked it up to a 14 point gain by the closing bell.
As expected, in the face of bad news, the financial gamblers could only cover their tracks, put on happy faces and say "all is well." Perhaps these thieves will be singing another tune when a few of them are perp-walked from their ivory towers in full view of the public which has grown to hate them and all they stand for.
All we've seen from the likes of the biggest banks in America is denial of wrongdoing, obfuscation, outright lying, and complete, unabashed manipulation of all markets they touch - bonds, equities and commodities - not to mention the under-the-table mortgage securitization, CDO and debt swap markets.
They are the most ruthless criminals on the planet, completely without conscience, and hopefully, lawmakers are beginning to catch on to their evil ways. Corners must be turned; equity and law must prevail.
Dow 12,285.15, +14.16 (0.12%)
NASDAQ 2,760.22, -1.30 (0.05%)
S&P 500 1,314.52, +0.11 (0.01%)
NYSE Composite 8,374.16, +6.85 (0.08%)
Not to belabor the obviously-fragile nature of the markets, advancing issues outdid decliners oddly enough, 3611-2838. However, new lows overtook new highs on the NASDAQ, 50-49, but new highs remained stubbornly ahead of new lows on the NYSE, 53-23, though the margin has shrunk considerably over the past few session. Volume remained purely a function of lack of interest.
NASDAQ Volume 1,728,764,375
NYSE Volume 4,249,863,500
Perhaps in response to the continuing turmoil, or maybe because the "Sultans of Swap" were too busy shedding documents to keep a handle on them, commodities took another robust turn positive. Crude oil gained another $1.00 during the NYMEX session, to close at $108.11, but gold and silver took home the trophies. Gold rocketed to another in a series of all-time highs, gaining $16.80, to $1,472.40 and silver exploded up $1.43, to $41.66, though both were higher in foreign markets, with gold at $1475.70 and silver romping higher at $42.14 per ounce.
Perhaps, more than turning corners, financial markets are meeting their eventual end, with paper currencies under attack from the growing howls of the general public worldwide, unhappy with rising prices and stagnant wages, governments with too much power and not enough nerve, honesty or will to do right.
These explosive moves in the precious metals are not to be taken lightly. The global Ponzi scheme of fiat money is being put to a severe test and is failing badly, today's activity just another warm-up for the real fireworks coming when the US congress considers whether or not to raise the debt ceiling, something they've done 174 times before.
From the ominous sounds emanating from the Tea Party wing in the House of Representatives, these could be the final days not only for the dollar as a reserve currency, but for every form of money not backed by some tangible asset, of which gold and silver are the obvious choices.
After the bell, Google announced its results for the first quarter of 2011, and from the looks of how it was trading after hours, investors were none too pleased that they missed their earnings per share estimate by three cents.
Even though Google topped revenue expectations, the stock was down nearly 30 points in the after-hours, a decline of more than five per cent.
That does not bode well for tomorrow's opening, which of course will have as an added bonus, the earnings release of the bank everyone loves to hate, Bank of America. Friday ought to be a doozy of a day.