In The News Today

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Jim Sinclair’s Commentary

The implication here is that the banks will not as easily be able to sneak out from under the obligations of the failed mortgage backed security derivatives as had been anticipated.

Federal Judge Grabs Bank Of America’s $8.5 Billion Settlement
Nathan Vardi, Forbes Staff

A federal judge ruled on Wednesday that the approval process for Bank of America’s $8.5 billion mortgage put-back settlement should be moved to federal court, making it more vulnerable to attack from investors and public officials.

William Pauley, a federal judge in Manhattan, said the case must be heard in federal court because it “implicates core federal interests in the integrity of nationally chartered banks and the vitality of the national securities markets.”

Bank of America in late June struck the $8.5 billion deal with 22 big institutions like BlackRock that had invested in Countrywide’s mortgage-backed securities and claimed that Bank of America had to make good on allegedly breached representations and warranties Countrywide made in connection with the quality of the underlying mortgage loans. Bank of New York Mellon, serving as the trustee for many of these deals, moved to get a New York state judge to rule it was acting reasonably in entering into the settlement on behalf of mortgage-bond investors.

But other investors in a relatively small number of these mortgage bonds sought more money by organizing as Walnut Place and intervened in the settlement. It is these investors that removed the case to federal court and for now have won a big battle by convincing Pauley it should remain there. The decision is a setback for Kathy Patrick and her big group of investors who hope to extend the Bank of America settlement to other big banks that underwrote soured mortgage-backed securities.

“This Court recognizes the procedural difficulty inherent in continuing this action in federal court,” Judge Pauley wrote. “But procedural complexity is not a ground for remanding an otherwise removable case.”

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Dear CIGAs,

Please check out the following presentation on the case for Juniors. This is a subject we all need to review in depth.

Click here to view the presentation in PDF format…

 

Jim Sinclair’s Commentary

This is the birthing of a third political party that will launch major attacks politically against the Bankster’s international establishment.

This is not a phenomenon to dismiss in any way. It is a game changer just like Arab Spring, but the pressing question is to what?

What would a government of 99%ers look like and do? Hyper inflate of course.

Australian riot police break up ‘Occupy Melbourne’ protest; up to 20 arrested
By Associated Press, Published: October 20

MELBOURNE, Australia — Riot police in Australia’s second-largest city broke up a demonstration linked to the “Occupy Wall Street” movement Friday, after a group of around 100 people protesting corporate greed defied an order to vacate a plaza.

Between 15 and 20 members of the “Occupy Melbourne” group were arrested and around 20 people, including two police officers, suffered minor injuries in the scuffle, Victoria state Police Assistant Commissioner Stephen Fontana said. Several demonstrators screamed and cried as police dragged and carried them away from the city square, where protesters had been camped out for nearly a week.

The so-called “Occupy” movement began last month in New York, where people frustrated with America’s stubbornly limp economy have been camped out on Wall Street to protest corporate greed and social inequality. Since then, thousands of people have joined similar protests across the globe, including several cities in Australia. Most of the protests have been peaceful — with the exception of a rally in Rome that turned violent last week when protesters smashed bank windows, hurled bottles and set cars on fire.

Around 100 “Occupy” activists in Melbourne had been camped out in the square without incident since Oct. 15, many spending each night there in tents. But the Melbourne City Council finally said it had had enough, and warned protesters to leave by Friday morning or face trespassing charges.

Most activists ignored the eviction order, linking arms and forming a human chain while shouting, “This is a peaceful protest!”

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Jim Sinclair’s Commentary

QE to infinity as there is no other functional option.

Fed’s Tarullo backs more MBS purchases
By Greg Robb
Oct. 20, 2011, 6:00 p.m. EDT

WASHINGTON (MarketWatch) — Federal Reserve Board Gov. Daniel Tarullo on Thursday backed another large-scale purchase program of agency-backed, mortgage-backed securities to support the economy. In a speech at Columbia University in New York, Tarullo said that the purchases could help the housing market, which is “central to the slow pace of the recovery.” The Fed has already purchased $1.25 trillion of agency MBS in 2008 and 2009 as part of its $2.3 trillion of asset purchases, or quantitative easing. Tarullo said that a proposal to allow underwater homeowners to refinance their mortgages would increase the effect of an MBS purchase plan. In an interview with The Wall Street Journal published Thursday, Boston Federal Reserve Bank President Eric Rosengren also said the Fed should consider more MBS. Tarullo added that he disagreed with some Fed officials who believe the central bank has done all it can to help the economy. “If we take account of the unusual nature of the current shortfall in fashioning policy responses, there is much that government policy — including monetary policy — can still do,” he said. 

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Jim Sinclair’s Commentary

Here is the latest from Martin Armstrong.

Click here to view the PDF…

 

Jim Sinclair’s Commentary

Although consequences have not been the highlight of the recent past, this is serious business.

GAO Finds Serious Conflicts at the Fed
October 19, 2011

WASHINGTON, Oct. 19 – A new audit of the Federal Reserve released today detailed widespread conflicts of interest involving directors of its regional banks.

“The most powerful entity in the United States is riddled with conflicts of interest,” Sen. Bernie Sanders (I-Vt.) said after reviewing the Government Accountability Office report. The study required by a Sanders Amendment to last year’s Wall Street reform law examined Fed practices never before subjected to such independent, expert scrutiny.

The GAO detailed instance after instance of top executives of corporations and financial institutions using their influence as Federal Reserve directors to financially benefit their firms, and, in at least one instance, themselves.  “Clearly it is unacceptable for so few people to wield so much unchecked power,” Sanders said. “Not only do they run the banks, they run the institutions that regulate the banks.”

Sanders said he will work with leading economists to develop legislation to restructure the Fed and bar the banking industry from picking Fed directors. “This is exactly the kind of outrageous behavior by the big banks and Wall Street that is infuriating so many Americans,” Sanders said.

The corporate affiliations of Fed directors from such banking and industry giants as General Electric, JP Morgan Chase, and Lehman Brothers pose “reputational risks” to the Federal Reserve System, the report said. Giving the banking industry the power to both elect and serve as Fed directors creates “an appearance of a conflict of interest,” the report added.

The 108-page report found that at least 18 specific current and former Fed board members were affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis.

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