STOCK MARKET WATCH, Tuesday October 27

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday October 27, 2009

Bush Administration Officials Convicted = 1
Name(s): David Safavian

Bush Administration Officials Charged = 1
Name(s):Richard Lopez Razo

Financial Sector Officials Convicted = 6

AT THE CLOSING BELL ON October 26, 2009

Dow... 9,867.96 -104.22 (-1.06%)
Nasdaq... 2,141.85 -12.62 (-0.59%)
S&P 500... 1,066.95 -12.65 (-1.17%)
Gold future... 1,043 -13.60 (-1.29%)
10-Yr Bond... 3.55 +0.06 (+1.63%)
30-Year Bond 4.36 +0.07 (+1.66%)

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U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES..............................................S&P FUTURES

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie, Silver and US$

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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[ozymandius]

1. Market Observation

Mainstream Logic
BY TONY ALLISON

Now that gold has topped $1,000 per ounce and is garnering some public attention, the mainstream media figures that this lofty price means that the gold “bubble” is ready to burst, and return to its proper (i.e., lower) price level. Fortune Magazine recently published “Beware the Gold Bubble” emphasizing the fundamentals point to an end of the “gold fever”.

It is interesting that Fortune looks at gold like any stock or commodity, with similar supply and demand characteristics. But gold is just gold, a substance that has been a store of value for thousands of years. Its worth is measured against paper currencies, which have no intrinsic value and can be created at will in unlimited quantities.

Purchasing power comparison

A bubble would indicate a wild over-valuation, but look at the fundamentals of the relationship between gold and the dollar since 1971, when the link between the two was severed by the Nixon administration. The dollar’s purchasing power is down 5 fold since 1971. Your 2009 US dollar is worth a pitiful 20 cents in purchasing power compared to a 1971 dollar. That’s one reason why the middle class can’t keep up, why they are more and more in debt up to their eyeballs. The purchasing power of an ounce of gold however, is four times greater than 1971.

.....

Global currency debasement

Given that the dollar’s value has shrunk by 80% since 1971, why would $1,000 per oz. be considered an “overheated” amount? The mainstream media always thinks in terms of dollars, and always assumes that a dollar today is the same as it ever was.

http://www.financialsense.com/Market/wrapup.htm

[Po_d Mainiac]

21. Seems the point that gold and other PM's

are not "printed" at the whim of governments, is lost on Mr Allison.

:donut:

[spotbird]

41. FWIW

Roubini thinks PMs aren't going to do anything, for a few years at least.

[spotbird]

42. FWIW

Roubini thinks PMs aren't going to do anything, for a few years at least.

[Joe Chi Minh]

58. Don't you mean "is not lost"? I thought it was one of Mr Allison's main

points, since on any significant scale, it must lead to devaluation of the currency.

Or have I completely misread or misattributed what I did read?

[ozymandius]

2. Today's Reports

09:00 CaseShiller Home Price Index Aug
Briefing.com -13.0%
Consensus -11.90%
Prior -13.30%

09:00 Consumer Confidence Oct
Briefing.com 52.6
Consensus 53.5
Prior 53.1

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

[ozymandius]

3. Oil hovers below $79 after 3-day slide

SINGAPORE – Oil prices lingered below $79 a barrel Tuesday in Asia after three days of losses as investors eyed a volatile U.S. dollar.

Benchmark crude for December delivery rose 14 cents to $78.82 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.82 to settle at $78.68 on Monday.

Crude jumped to a 12-month high at $82 a barrel last week as the dollar weakened amid concerns that massive global stimulus spending will eventually spark inflation. Since oil is priced in dollars, a drop in the U.S. currency makes it cheaper to international investors.
.....

In other Nymex trading, heating oil rose 1.06 cents to $2.04 a gallon. Gasoline for November delivery held at $2.03 a gallon. Natural gas for November delivery slid 2.2 cents to $4.49 per 1,000 cubic feet.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

6. US Retail Gasoline +10c At $2.674/Gal; Above Yr-Ago - EIA

NEW YORK (Dow Jones)--The national average retail price of regular gasoline rose 10 cents a gallon, or 3.9%, to $2.674 a gallon in the week ended Monday, the Energy Information Administration said.

The rise was the biggest penny-for-penny gain since May 11 and lifted prices to the highest level since June 22. Prices were 1.8 cents, or 0.7%, above the year-ago level. That's the first time retail gasoline was priced above a year earlier since Oct. 20, 2008.

Prices have gained 8.3%, or 20.6 cents a gallon, as crude-oil futures prices broke out of the $65-$75 a barrel range since mid-July and traded to a one-year high of $82 a barrel.

Nationwide, prices are 35%, or $1.44 a gallon, below the record $4.114 a gallon hit July 7, 2008.

http://online.wsj.com/article/BT-CO-20091026-714671.html

[Demeter]

30. Still Waiting for Crorresponding Drop in Gasoline......

[ozymandius]

4. Economic reports point to bumpy recovery

NEW YORK (Reuters) – Regional economic reports on Monday suggested the U.S. economy has clambered back to levels associated with the end of recession, but recovery will be patchy and may prove fleeting.

Economic activity and manufacturing data for the U.S. Mid West and Texas hinted the impact of the global financial crisis is slowly abating as the economy emerges from the longest recession in 70 years.

.....
According to the median forecast of economists polled by Reuters, the U.S. economy grew 3.3 percent in the third quarter after shrinking 0.7 percent in the second quarter.

Market participants will also be watching to see if the Federal Reserve changes its language on quantitative easing measures and future interest rate decisions in response to the shifting economic conditions at the central bank's two day, Nov 3-4 policy-setting meeting next week .

http://news.yahoo.com/s/nm/20091027/ts_nm/us_usa_economy

---

Ummm.. Have economists forgotten that the growth was artificially stimulated through government spending programs? And that of all job losses, combined over the past two years, 50% are considered permanently destroyed?

[ozymandius]

5. The accelerating decline of newspapers (with one bright spot)

U.S. newspaper circulation has hit its lowest level in seven decades, as papers across the country lost 10.6 percent of their paying readers from April through September, compared with a year earlier.

The newest numbers on newspaper circulation, released Monday by the Audit Bureau of Circulations, paint a dismal picture for an industry already feeling the pressures of an advertising slump coupled with the worst business downturn since the Great Depression.

.....
A number of factors contribute to the lower circulation numbers. Several publishers have stopped delivering newspapers to far-flung sites to save fuel and production costs. Publishers also have hiked prices.

.....
Almost without exception, the circulation gainers are the nation's smallest daily newspapers, which tend to focus almost all of their limited resources on highly local news that is not covered by larger outside organizations. Also, these papers tend to have a lock on local ad markets.

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/26/AR2009102603272.html

---

Smaller newspapers' success can be attributed to that simple maxim: "local, local, local".

[Demeter]

31. It's Not Working in Ann Arbor

When the local rag decided to crash and burn,it rose again, not as a phoenix, but as a Thursday and Sunday with an online site. The Paper is full of hard right-wing crap and circulation continues to drop. After all, it's hard to read George Will, David Brooks and some third GOP creep on the same op-ed page with no contrasting opinion on a Sunday morning. And the slick ads are back, but the classifieds consist of houses for sale at newly reduced prices...

Then there is the weekly free rag, thrown in every driveway. It too focuses on "local".

Why do they think that locals sports news constitutes local news? The local political reports focus on the emailing that city council members do while listening to long-winded bores who aren't getting the message that their case will never be heard with sympathy.

We are not served with real news, just propaganda designed to indoctrinate Ann Arbor into the Grand Rapids-De Vos, GOP mindset.

I've thought that if it weren't for the fact that this firm owns the press, some entrepreneur could put together a local insert to piggyback onto the NYTimes, which truly is our daily paper and has the highest circulation.

Trouble is, the GOP-owned press has the contract to print the NYTimes!

[ozymandius]

7. Healthcare system wastes up to $800 billion a year

WASHINGTON (Reuters) - The U.S. healthcare system is just as wasteful as President Barack Obama says it is, and proposed reforms could be paid for by fixing some of the most obvious inefficiencies, preventing mistakes and fighting fraud, according to a Thomson Reuters report released on Monday.

The U.S. healthcare system wastes between $505 billion and $850 billion every year, the report from Robert Kelley, vice president of healthcare analytics at Thomson Reuters, found.
.....

Some other findings in the report from Thomson Reuters, the parent company of Reuters:

• Unnecessary care such as the overuse of antibiotics and lab tests to protect against malpractice exposure makes up 37 percent of healthcare waste or $200 to $300 billion a year.

• Fraud makes up 22 percent of healthcare waste, or up to $200 billion a year in fraudulent Medicare claims, kickbacks for referrals for unnecessary services and other scams.

• Administrative inefficiency and redundant paperwork account for 18 percent of healthcare waste.

http://www.reuters.com/article/newsOne/idUSTRE59P0L320091026

[AnneD]

18. In all this article....

they don't mention 'he who's name can not be mentioned' and is the biggest source of waste.....the insurance companies. A doc's practice has to higher a full time person just to deal with ins co all day- getting approvals, tracking payments, submitting forms, God you name it. And this on top of what the patients deal with. I can't remember the exact number but insurance accounts for at least 6 out of 10 dollars spent on health care. That is why we spend more than any other country on care.

[ozymandius]

8. Dodd Seeks to Freeze Credit-Card Rates

....
Sen. Christopher Dodd of Connecticut, who heads the Senate Banking Committee, introduced a measure that would freeze rates on existing card balances until February, when tough new rules for the industry are slated to go into effect.

Mr. Dodd said he was making the move because companies are using the delayed implementation of the new standards, passed by Congress in May, to push through aggressive rate and fee increases. "No sooner had it been signed into law, but credit card companies were looking for ways to get around the protections," Mr. Dodd said in a written statement.

.....
Mr. Dodd's measure is part of a broader effort by congressional Democrats to crack down on what they see as gaming of the new rules by card issuers. Reps. Barney Frank (D., Mass.) and Carolyn Maloney (D., N.Y.) have introduced House legislation that would move up the effective date of the new restrictions to December from February.

The House Financial Services Committee has already approved the accelerated date.

http://online.wsj.com/article/SB125657785576308541.html?mod=WSJ_hps_LEFTWhatsNews

---

Jeebus! Could it really be that simple anymore? When you embrace populist causes, rather than capitulate to the desires of your corporate overlords, you stand a better chance of getting elected?

[Dr.Phool]

11. More useless half measures.

That will just accelerate the rate hikes. Does Dodd think they can't raise rates faster than a law can pass? Too late for Citi customers already.

What needs to be done, is pass a tough new usury law, with a rate cap. But, that would be biting the hand that feeds him.

[ozymandius]

14. Thank you for the reality check.

Question comes to mind: since Shitibank, et al. has already raised rates to near 30% (for some good customers) - how much further can rates increase? It would seem that aggressive usury from the banks now would have an immediate impact on how any new regulation is written. Although - such a move from credit card issuers would not surprise me. Just thinking...

[Demeter]

32. The Endgame Is: The Credit Card Business Collapses

But you knew that. It's just counting up the screaming and the dead.

Sic semper tyrannis!

[spotbird]

39. 30% is a bargain

There was a guy on Consumerist who had an 80% rate recently.

In other words, it looks like there is no limit.

[Po_d Mainiac]

22. How about a roll-back to to non loan shark rates?

Why anyone continues to do business with Shiti, BofA'holes, WF (we'll f**kya), etc. is beyond rational.

Customers can shut these jerks down in a heartbeat by simply moving their accounts to local banks and credit unions. :grr:

[Dr.Phool]

23. We sold the last of our gold last week.

We thought about parking it some place, where it will at least earn something, as it's currently just sitting in cash in the safe deposit box.

I checked out some rates for CD's and money markets. Wachovia (WF) is offering 0.1% on their "High Performance Money Market Fund".
:rofl:

CD's were at around 1%.
:rofl:

I'll leave it in the box.

[Demeter]

34. Do you think gold has peaked, then?

Congrats on the new arrivals! I'll bet you get no sleep for a while.

[Dr.Phool]

54. Just a hunch.

It's had a long run.

[spotbird]

43. That isn't a safe deposit box I hope?

Who knows what to do. That's the point isn't it?

Have you looked at currencies? I haven't for a while, but six months ago Canada made real sense.

[spotbird]

40. Great point

But people aren't rational creatures for the most part, and half of them aren't smart. What these rates do is make crime legal. Great work if you can get it.

[spotbird]

38. State's rights

Congress should let the state's have their authority back if he really wanted to do something. But it's just about the show to Dodd.

[Dr.Phool]

9. Forecast for yesterday: 100% chance for puppies!

We went to Tampa Area Retriever Rescue over the week-end. We brought home female 2 pups, a 9 week old Lab- Springer mix, and a 12-14 week old Lab-Terrier mix. We decided to keep the Springer mix, and to foster the Terrier mix, until they can find a good home for her. They were both spayed and got all of their shots, except rabies, yesterday. They're over their medication and surgery already, and it's like a Chinese fire drill around here this morning.

Sara, Queen of The Loveseat, looks just like that "There ain't no bugs on me" pup in the commercials.

[ozymandius]

10. Oh, what fun!

Congratulations on the new arrivals and especially the new permanent little girl. I'll bet you did not get much sleep last night, eh? :toast:

[Dr.Phool]

13. They slept until the my wife's alarm went off this morning.

The vet said the pain medication would probably last that long.

I had to get them out the door real quick this morning.

Apparently, my wife just forgot that she has to keep her underwear drawer closed from now on. They're running around with it now. :rofl:

[ozymandius]

15. Bwahaha!

:spray:

[DemReadingDU]

19. too fuuny

Puppies are such fun
:)

[AnneD]

25. Glad you explained....

I thought Fudd was a naughty boy!!!

[Dr.Phool]

26. The Fudd is no longer with us.

RIP

[AnneD]

36. I am so sorry....

I didn't know-when did this happen. From what you say about him, he sounded like a great companion.

[Dr.Phool]

48. He went down on Wed.

We cried a couple of days and got a new one.

His final day, he had bacon and eggs, toast and jelly for breakfast. Steak and a couple of Heineken for lunch. A prime rib sandwich and more Heineken for dinner, and a stop for frozen custard on the way to the vet.

He went loved and happy.

[AnneD]

52. AWWW....

What took him if you don't mind my asking and Damn-I want that for my last meals. I'll miss my Fudd stories.:cry:

[Dr.Phool]

53. Old age mostly

He's had arthritis for a while, and we strongly suspected cancer. He was eating like a horse and losing weight. Was having pain, and trouble walking, and breathing. We didn't want him to suffer. He deserved to go happy.

[AnneD]

60. That is a loving and unselfish thing to do......

My friend lost her companion of many years last week. It's been tough for her too. She suspected a tumour feeding off a small artery. She passed on before my friend could reach the vet.

[UpInArms]

28. awwwww - that makes me so happy

for you and yours and the pups :D

:yourock:

[Tansy_Gold]

46. I told you they'd find you

:thumbsup:

[ozymandius]

12. Is Citi being forced to downsize by Obama?

By Edward Harrison:

It seems that not a day goes by when you don’t hear about some asset sale in Citigroup’s far-flung empire. Of all the major too-big-to-fail institutions, it is easily the most troubled: the poster child for everything that is wrong in finance in America.

But, when President Obama’s Pay Czar Kenneth Feinberg stepped in to limit pay at Citi and six other failed institutions living off of taxpayer largesse, I noticed something that made me wonder if there was more going on than meets the eye at Citi. I am starting to think Citigroup is being forcibly dismantled by the Obama Administration as a condition of its bailout. Could there be some bailout strings of which we are not yet aware?

Why is WFC not getting pay caps?

The thing I noticed was Wells Fargo’s name missing from Kenneth Feinberg’s list. The seven companies now subject to pay caps are: Citigroup, GMAC, American International Group, General Motors, Chrysler Group and Chrysler Financial. But, last time I checked, Wells Fargo was suckling from the government breast via a $25 billion TARP payment. What gives?

The only logical conclusion one can make is that the Obama Administration has excluded Wells Fargo because it is a healthier institution than the pay-cap seven. I agree with that assessment despite a downbeat post on Wells earnings last week. The headwinds from Wachovia are significant. But the underlying earnings power of Wells Fargo’s franchise is of a different caliber than Citigroup’s. If you saw Citi’s earnings report, it was a disaster in banking, credit cards, trading, you name it. Everywhere, Citigroup was getting killed.

So clearly, in looking at the too big to fail banks, something quite awful is still amiss at Citi (and at BofA to a degree) that is not at Wells Fargo or JPMorgan Chase (Goldman and Morgan Stanley are not really banks).

Read more: http://www.creditwritedowns.com/2009/10/is-citi-being-forced-to-downsize-by-obama.html#ixzz0V88eqBif

[Demeter]

51. More Citi News

Nationalized Citi Mexicana Redux

http://www.creditwritedowns.com/2009/10/nationalized-citi-mexicana-redux.html

Back in March when the US Government felt compelled to bail out out Citigroup, Tracy Alloway over at FT Alphaville noticed a curious thing – Citigroup had effectively been nationalized.

No, they were not seized by government, but Citi was controlled by government. The Feds had 36% of shares outstanding, which in many cases is considered to be a controlling interest for a government (for instance, until the Open Skies Treaty pushed the level to 49%, foreign carriers could not take more than a 25% stake in any airline as this is considered a threat to national security). That matters because of Banamex.

From Alphaville on 2 Mar:

Does the US government’s 36 per cent stake in Citi violate Mexican ownership laws? Have we got our countries confused? No.

Citi owns Banamex, a Mexican bank with circa 1,200 branches and 2.6m checking accounts. And Latin American finance blog Inca Kola sees a fight brewing over the Southern subsidiary:

The nub of the issue revolves around Mexican law, which states in crystalline manner that foreign governments cannot own more than 10% of any bank that operates inside Mexico. It’s as clear as a bell and on the statute. So as Banamex is a wholly owned subsidiary of Citigroup (C paid $12.1Bn or so back in 2001 for the bank) if the US Gov’t takes its 36% stake in Citigroup then it will be a larger-than-10% shareholder of Banamex, something against Mexican law. Won’t it?

Mexico’s National Banking and Securities Commission is therefore investigating, while Banamex is saying that the North American Free Trade Agreement will (somehow) protect it.

The next day Bloomberg reported that Mexican law makers had decided to pursue a bill to force Citi to disgorge itself of Banamex because of it was a government –controlled entity. Then this story disappeared from the mainstream press.

Now, as background, after the recession of 1991, Citicorp was bailed out by Prince Waleed of Saudi Arabia because it was in danger of failing. Low interest rates and the money from Prince Waleed did the trick and Citi experienced a remarkable recovery – and eventually the broader economy did as well. In fact, recovery was enough that Alan Greenspan attempted to raise rates fairly rapidly (this was before policy asymmetry at the Fed because the norm). The result was the Tequila Crisis and the near bankruptcy of Mexico (see my post “1995” for more.)

Banamex , the 2nd largest Mexican bank, was made insolvent due to the Tequila crisis. And what do you know, Citi swooped in to buy it lock, stock and barrel. Spain’s BBVA later took over the re-privatized Bancomer that had been nationalized after the Latin American Debt crisis in 1982 (also induced by rising rates in the US).

These incursions into Mexico have caused outrage. Why should foreigners own the two largest banks in the country? So, the topic of Nationalized Citibank has been percolating for a while in Mexico. And it has just resurfaced.

From Breakingview.com:

Mexico’s high court is set to decide this week whether to hear a case brought by a contingent of Mexican senators that Citi must offload Banamex because a foreign government owns more than 10 percent of its stock. They want the court to decide whether the finance ministry had the constitutional right to decree in March that the United States government’s 34 percent slice of Citi was acceptable because it was intended to be short term.

So Citi is hardly up against a wall just yet — and it reckons any decision to force a sale would breach the North American Free Trade Agreement anyway. But if push comes to shove, the bank should be prepared to put up more of a fight than it did for Phibro.

Quite frankly, America is used to treating Mexico – all of Latin America, really – like its poor cousin. This displays a lack of respect that many there find galling. If Citi is forced to disgorge itself of Banamex, it will be interesting to see not how Citi reacts, but how the Obama Administration reacts since he wants to present a new American image on the world stage.

By the way, CLICK ON THE ABOVE LINK TO SEE a hilarious video of ‘Nationalized Citibank’ that captured the mood in America back in March when the bailout happened.


Citibank Belgium to pay ‘duped’ savers 128mn for bad Lehman deal

http://www.creditwritedowns.com/2009/10/citibank-belgium-to-pay-customers-128mn-for-bad-lehman-deal.html#ixzz0V9rTrJo3

This is my translation of a Dutch-language article which appeared today in Belgian daily De Tijd. Let’s see if this news is picked up in the U.S.

Citibank Belgium never should have recommended the controversial Lehman Brothers investments to its customers. So states the writ of the Brussels public prosecutor on the case.

The collapse of Lehman Brothers lost more than 4,000 Citibank customers, 128 million euros. The public prosecutor accuses Citibank of a “conflict of interest". "The bank had apparently instructed a higher-level committee to work toward the wholesale transfer of ordinary savings account money to Lehman Brothers."

According to the prosecutor, this is the reason Citibank used "misleading" advertising and many other “tricks” to systematically sway customers to exchange their savings for Lehman products, concealing the bank’s true risks, returns and capital guarantees. The court now demands that Citibank pay back the full 128 million euros, plus interest and fees.

Political reactions
MP Hans Bonte (SP.A) is very pleased that the Brussels public prosecutor also came to the conclusion that Citibank sold investments of the now bankrupt Lehman Brothers in an "unfair and irresponsible manner.” "That is what we have charged for months and years," said the Socialist opposition figure. The most important thing for him now is that all victims be identified and if possible obtain compensation.

Better would be if Citibank itself took on its responsibility and reimbursed customers who lost their savings, Bonte said in reaction to the news.

He believes that the Government should draw lessons from the case. According to Bonte, it is clear that something wrong with the supervision of the banks by the Banking, Finance and Insurance Commission (CBFA). Immediately he called for legislation on the appeals claim, so that a lawsuit could be filed in this case for the 4,000 victims.

Commerce Minister Vincent Van Quickenborne (Open VLD) called on Citibank again to choose an efficient settlement instead of letting it come to a possibly long and damaging process. The Minister also notes that the victims who have yet to take civil action be informed of the impending trial, so they also can take part in the civil action.

He recalls that he last year he ordered the Economic Inspectorate investigate the way Lehman Brothers products were advertised and sold by Citibank . This dossier was turned over to the prosecutor in December.

Although the analysis of the Economic Inspectorate showed that there are about 4,000 potential victims, there are only 1300 who have reported to the Inspectorate or the prosecutor. At the request of the Minister, the prosecutor and Economic Inspection examined how the remaining 2700 known victims can be informed about their rights before the start of legal proceedings. They have now been notified by letter.

The trial starts in December. Van Quickenborne hopes that as many people as possible can file civil claim to be compensated for their loss. He immediately repeated his "resolute" call to Citibank to not let it go so far and to choose an efficient settlement.

[ozymandius]

16. Have fun today, folks.

I need an early start to the school day today.

:donut: :hi:

[AnneD]

17. Morning Marketeers...

:donut:and lurkers Glad to get the first rec in, guess it is true...the market never sleeps.

Today, in honour of of NC4BO, our ever growing and declining middle class, I thought I would post a bit about Hobo. I first heard about Hobos from Mom. Seems that many a man was thrown out of work in the first depression. Many left their families to find work. Some returned, some never did. Mom was raised by her Grandpa and Grandma. They owned a small self sufficient farm in Glendale Arizona so they saw many a folk and family on their way to the promised land of California. Families were in cars and men rode the rails. Papa, as she called Grandpa, was a decent compassionate Christian. He never refused anyone that knocked on his door and neither did Grandma. He was always finding hobo marks on his land and would erase them , but they still came, frequently offering to work for a meal and a place to sleep. Papa would make sure they got a good meal and send them off with a good meal and a little extra (what ever was in season). The folks Mom remembers meeting were always a decent sort, just down on their luck. So courtesy of Wikipedia.....

Hobo Code of Ethics
Decide your own life, don't let another person run or rule you.
When in town, always respect the local law and officials, and try to be a gentleman at all times.
Don't take advantage of someone who is in a vulnerable situation, locals or other hobos.
Always try to find work, even if temporary, and always seek out jobs nobody wants. By doing so you not only help a business along, but ensure employment should you return to that town again.
When no employment is available, make your own work by using your added talents at crafts.
Do not allow yourself to become a stupid drunk and set a bad example for locals treatment of other hobos.
When jungling in town, respect handouts, do not wear them out, another hobo will be coming along who will need them as bad, if not worse than you.
Always respect nature, do not leave garbage where you are jungling.
If in a community jungle, always pitch in and help.
Try to stay clean, and boil up wherever possible.
When traveling, ride your train respectfully, take no personal chances, cause no problems with the operating crew or host railroad, act like an extra crew member.
Do not cause problems in a train yard, another hobo will be coming along who will need passage through that yard.
Do not allow other hobos to molest children, expose all molesters to authorities, they are the worst garbage to infest any society.
Help all runaway children, and try to induce them to return home.
Help your fellow hobos whenever and wherever needed, you may need their help someday.
If present at a hobo court and you have testimony, give it, whether for or against the accused, your voice counts!

Hobo Signs
A cross signifies "angel food," that is, food served to the hobos after a party.
A triangle with hands signifies that the homeowner has a gun.
Sharp teeth signify a mean dog.
A square missing its top line signifies it is safe to camp in that location.
A top hat and a triangle signify wealth.
A spearhead signifies a warning to defend oneself.
A circle with two parallel arrows means to get out fast, as hobos are not welcome in the area.
Two interlocked humans signify handcuffs. (i.e. hobos are hauled off to jail).
A Caduceus symbol signifies the house has a medical doctor living in it.
A cross with a smiley face in one of the corners means the doctor at this office will treat hoboes for free.
A cat signifies that a kind lady lives here.
A wavy line (signifying water) above an X means fresh water and a campsite.
Three diagonal lines mean it's not a safe place.
A square with a slanted roof (signifying a house) with an X through it means that the house has already been "burned" or "tricked" by another hobo and is not a trusting house.
Two shovels, signifying work was available (Shovels, because most hobos did manual labor).

For lingo and other interesting facts go to

http://en.wikipedia.org/wiki/Hobo

Happy hunting and watch out for the bears.

[DemReadingDU]

20. Good to know those signs

I have a feeling we will be seeing something similar in years to come. Vaguely when growing up, I remember that hobos left signs, but had forgotten what they meant.

[AnneD]

24. It will all be coming back I am afraid.....

The saddest sign-Woman with children. We are starting to lose our future.

[Demeter]

47. I'm Waiting For Us To Lose Our Apathy and Complacency

for 30% of the population, that will be a loooong wait.

And as for Congress, who knows how long it will take, and how much?

[UpInArms]

27. dollar watch

http://quotes.ino.com/chart/?acs=NYBOT_DX&v=i

Last trade 75.980Change -0.081 (-0.10%)

U.K. Consumer Consumption Expected To Rebound, Will BoE Remain On Hold?

http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/top_fx_headlines/2009-10-27-1159-U_K__Consumer_Consumption_Expected_To.html

GBP/USD – The U.K. CBI distributive trends gauge for October rose to 8 from 3 as retail sales grew by the most in almost two years. A stabilizing housing market due to an influx of new home buyers has led to an increase in purchases of appliances and furniture. Although, recent GDP figures showed that the U.K. economy contracted 0.4% and remains in a recession the outlook is improving as early forecasts are for an improvement to 19 in November. An improvement on consumer consumption could leave the BoE on hold despite increased speculation that they will add to their asset purchase program at their November meeting.

USD/CHF – The UBS consumption indicator slightly improved in September to 0.63 from a six year low of 0.62 the month prior as rising unemployment continues to weigh on demand. The measurement which forecast consumer spending over the next three months is signaling that improving demand for exports isn’t translating into domestic growth at this time. Economist are forecasting that demand will be subdued until the middle of 2010. Therefore, the Swiss National Bank is expected to remain on hold until then and will continue to look to defend against Franc appreciation in order to stimulate demand from abroad.

...more...

Crude Oil, Precious Metals Position to Extend Losses

http://www.dailyfx.com/forex/fundamental/forecast/daily/2009-10-27-0748-Crude_Oil__Precious_Metals_Position.html

Commodities are positioned for further losses as crude validates yesterday's bearish outlook while gold and silver break down out of recent trading ranges.

Commodities – Energy
Crude May Rebound on BP Earnings But Technicals Point Lower

Crude Oil (WTI)       $78.79        +$0.11       +0.14%

As we argued yesterday, crude prices continued lower after capitulation below the $80 level to pause just above the $78 mark. A Bearish Engulfing candlestick formation has been formed and is hinting at continued downside ahead, with the next level support lies just below the $77 level. On the fundamental side of things, European equity futures are trading higher after UK oil giant BP Plc posted better than expected earnings for the third quarter, which bodes well for WTI contract both and may help force a re-test of the $80 level before downside momentum resumes.



Commodities – Metals
Gold, Silver Break Lower Out of Trading Ranges, Further Declines Ahead

Gold       $1042.82       +$4.32       +0.42%

Gold prices have dropped below the boundaries of the range that had contained prices in October to find interim support just above $1037.03. Prices appear set to re-test the broken channel bottom, with a return to bearish momentum from there to see the next level of support above $1020.40. The trajectory of equities and the US Dollar are likely to be the primary drivers in the day ahead: earnings from Daimler AG still on tap in Europe while profits reports from US Steel, AK Steel, and Valero as well as consumer confidence figures set for release in the States.

Silver $17.15 +$0.08 +0.45%
The technical picture for the lesser precious metal has mirrored that of gold, with prices breaking below the range that held since the beginning of the month at $17.25 and now retracing to re-test that level. From here, the door looks open for a move to test $16.75, the 9/30 swing high. Fundamentally, the broad trajectory of risk sentiment is likely to dominate.



...more...

[UpInArms]

29. Goldman Sachs says "dark pools" help investors

http://www.reuters.com/article/businessNews/idUSTRE59Q0QP20091027?feedType=RSS&feedName=businessNews

(Reuters) - Anonymous trading venues known as "dark pools" are a technological evolution that have benefitted both institutional and retail trading by bringing down transaction costs, Goldman Sachs Group Inc (GS.N) said in a memo to the Securities and Exchange Commission.

Last week, the SEC voted unanimously for ways to make the dark pools more transparent, such as revealing the electronic trading messages that are sent to a limited group of market participants.

In a report submitted to the SEC on October 22, Goldman said the investing community -- especially retail -- has benefitted from the evolving market structure and industry competition.

The Goldman report, posted on the SEC website, summarized a meeting held on September 24 between its executives and the commission staff to discuss issues involving market structure including short selling and dark pools.

In the report, Goldman stated five common myths regarding dark pool trading and supplied arguments in an effort to dispel those myths.

...more...

doesn't it comfort you to know that the SEC website has become a forum for GS propaganda?

[AnneD]

35. I prefer....

the bright lights of truth and reality when making my deals. Darkness is for rats, roaches and thieves.

[Roland99]

37. And here I thought competition is what would bring down costs

Wither away the competition or gobble them up and where's the incentive to keep costs down (other than labor, which firms like Goldman don't seem to care about too much, esp. when it comes in the form of bonuses)

[Hugin]

45. I am at a loss to develop a metaphor for how wrong this is...

It's like the KKK briefing the EEOC on ethics?

Anyone? Suggestions? I need a little help here... I'm stunned and incap-ed! :eek:

[tclambert]

50. Darkness and anonymity help thieves get away with it.

Therefore it economically benefits thieves. So, to encourage these economic benefits, we should outlaw streetlights, porch lights, locked doors, and fingerprint databases.

[Festivito]

33. Debt: 10/23/2009 11,895,889,017,776.15 (DOWN 919,226,794.13) (Fri)(Surplussier!)

(Small drops today, but the Obama surplus grows -- okay, just a little -- but, it grows… it's surplussier. Good day all.)

= Held by the Public + Intragovernmental(FICA)
= 7,475,706,137,162.55 + 4,420,182,880,613.60
DOWN 105,634,856.79 + DOWN 813,591,937.34

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 308-Million person America.
If every American, man, woman and child puts in $3.25 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.75, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 10 seconds we net gain a another American, so at the end of the workday of the report, there should be 307,786,461 people in America.
http://www.census.gov/population/www/popclockus.html ON 09/27/2009 07:13 -> 307,558,299
Currently, each of these Americans owe $38,649.81.
A family of three owes $115,949.44. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 days.
The average for the last 22 reports is 3,734,783,468.62.
The average for the last 30 days would be 2,738,841,210.32.

There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 17 reports in 23 days of FY2010 averaging -0.82B$ per report, -0.61B$/day.
Above line should be okay

PROJECTION:
There are 1,185 days remaining in this Obama 1st term.
By that time the debt could be between 11.2 and 18.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
10/23/2009 11,895,889,017,776.15 BHO (UP 1,269,011,968,863.07 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 -0,013,939,985,735.60 ----------BHO

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
10/02/2009 +000,166,120,250.33 ------------********
10/05/2009 -000,035,707,866.46 ---- Mon
10/06/2009 +000,640,950,413.48 ------------********
10/07/2009 +000,015,260,219.44 ------------*******
10/08/2009 -027,497,592,311.52 -
10/09/2009 -000,014,303,257.45 ----
10/13/2009 +010,339,703,734.17 ------------********** Tue
10/14/2009 +000,250,135,805.15 ------------********
10/15/2009 +040,455,301,335.22 ------------**********
10/16/2009 -000,034,671,440.79 ----
10/19/2009 +000,169,101,777.19 ------------******** Mon
10/20/2009 +000,084,506,561.85 ------------*******
10/21/2009 +000,260,615,642.06 ------------********
10/22/2009 -054,881,746,021.15 -
10/23/2009 -000,105,634,856.79 ---

-30,187,960,015.27 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4119129&mesg_id=4119151

[Festivito]

59. Debt: 10/26/2009 11,897,586,393,656.67 (UP 1,697,375,880.52) (Mon)(+12B,Surplus)

(The Obama fiscal year 2010 surplus continues. A little more debt was added today, but not enough to stop Obama's actual surplus from continuing. I think it's darn good fun while it lasts.)

= Held by the Public + Intragovernmental(FICA)
= 7,475,025,203,198.51 + 4,422,561,190,458.16
DOWN 680,933,964.04 + UP 2,378,309,844.56

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 308-Million person America.
If every American, man, woman and child puts in $3.25 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.75, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 10 seconds we net gain a another American, so at the end of the workday of the report, there should be 307,812,381 people in America.
http://www.census.gov/population/www/popclockus.html ON 09/27/2009 07:13 -> 307,558,299
Currently, each of these Americans owe $38,652.07.
A family of three owes $115,956.22. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 31 days.
The average for the last 21 reports is 6,042,296,980.11.
The average for the last 30 days would be 4,229,607,886.08.
The average for the last 31 days would be 4,093,168,922.01.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 18 reports in 26 days of FY2010 averaging -0.68B$ per report, -0.47B$/day.
Above line should be okay

PROJECTION:
There are 1,182 days remaining in this Obama 1st term.
By that time the debt could be between 11.3 and 18.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
10/26/2009 11,897,586,393,656.67 BHO (UP 1,270,709,344,743.59 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 -0,012,242,609,855.10 ----------BHO

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
10/05/2009 -000,035,707,866.46 ---- Mon
10/06/2009 +000,640,950,413.48 ------------********
10/07/2009 +000,015,260,219.44 ------------*******
10/08/2009 -027,497,592,311.52 -
10/09/2009 -000,014,303,257.45 ----
10/13/2009 +010,339,703,734.17 ------------********** Tue
10/14/2009 +000,250,135,805.15 ------------********
10/15/2009 +040,455,301,335.22 ------------**********
10/16/2009 -000,034,671,440.79 ----
10/19/2009 +000,169,101,777.19 ------------******** Mon
10/20/2009 +000,084,506,561.85 ------------*******
10/21/2009 +000,260,615,642.06 ------------********
10/22/2009 -054,881,746,021.15 -
10/23/2009 -000,105,634,856.79 ---
10/26/2009 -000,680,933,964.04 --- Mon

-31,035,014,229.64 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=post&forum=102&topic_id=4120465&mesg_id=4120622

[DemReadingDU]

44. Vietnam Veterans

I'm real proud of my spouse. He served with the Marines in Vietnam during the fierce February 1968 battles. I just posted a link in the Veterans forum, about a period spent at The "Rock Crusher", http://www.2-7-68.com/FB-Rock-Crusher.html

If you are aware of this time in history, or know of anyone who might have served then, or if just want to read some military history, click this link. Thanks!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=259x26624

[tclambert]

49. Sorry I haven't contributed anything lately, I've been following a solar car race.

The World Solar Challenge is going on in Australia. Cars that run on sunshine race across the continent from north to south 3000 km. The best way to follow this race is online (I like http://solarcar.engin.umich.edu/). My son used to be crew chief of the University of Michigan team. This year's UM team is in 3rd, fighting for 2nd with the Dutch defending champions, Team Nuon, from Delft Technical University. A team from Japan is in 1st by a long way. MIT is fourth. Stanford is in it, too (12th last I looked). A fourth American team comes from the tiny liberal arts college, Principia. And they are in 6th. There are about thirty teams running. Check that, some are no longer running. One hit a tree. The driver was fine, but the car was unrepairable in the timeframe of the race.

At the same time as this race, there is a demonstration race of high-efficiency cars, trying to make the transit using as little fuel as possible. There's a Tesla Roadster, a pure electric car involved, reportedly the only Tesla in Australia. Their problem is there are places in the Outback with no electrical outlets for many, many miles. So they have a gas-guzzling generator truck following the Tesla to recharge it. Some of the other high-efficiency cars are showroom available diesels.

The lead solar cars have passed the high-mpg gas cars. The high-mpg cars are trying to go the minimum allowed to conserve fuel. The solar cars are going as fast as the weather permits. (On the 2nd day, they hit a dust storm that cut the solar intensity in half.) They often hit 65 mph.

The turnout for both these races has been larger than I can remember in previous years. The US hasn't entered 4 competitors in a long time. I take this to mean that people are taking fuel economy and alternative energy more seriously. The solar cars are pushing solar cell, battery, and electric wheel motor technology to the limits. One team said they have 34% efficient solar cells. (Leaves are 6 - 11%.) And they're cramming >5 kWh of electrical energy into 25 kg of batteries.

[spotbird]

55. Anyone following the shock, shock that Lieberman

plans to filibuster the PO. People are pretty easily bamboozled. They seem to really think it had a prayer if Lieberman hadn't come through.

[Demeter]

57. What a Jerk

On the other hand, this could get us to Medicare for everyone....

[Demeter]

56. More on Banks Engaging in Mortgage Fraud

http://www.nakedcapitalism.com/2009/10/more-on-banks-engaging-in-mortgage-fraud.html

Hoisted from comments TO NAKED CAPITALISM:

I am a lawyer who has been involved in corporate finance for over 25 years. First, if you believe that securitization offers benefits (cost reductions) to consumers then MERS is not per se a bad thing in that it reduces overall transaction costs which should in part be passed on to the homeowner borrower. As you note, the problem is more a change in standards (perhaps ethics and morality) in the last ten years in the industry.

The problem is not MERs by itself but how the securitization industry has changed in recent years to the detriment of consumers and investors in the banks and other companies that have blown up as a result of an important industry being turned into basically a circus. I can share my own experience as a homeowner to demonstrate how crazy things have become.

I had a mortgage on my home that was originated over 15 years ago at a local bank. The mortgage had been sold (through five intervening transactions)over the years to Washington Mutual. Two years ago I decided to pay the loan off. At the end of a month, I sent in a check for the full balance of principal and interest on the loan and requested a deed release be filed. This was all in accordance with the terms of my promissory note and mortgage the legal agreement governing all parties.

Two weeks later I received my check back in the mail from WMU with a letter stating that the payoff was not in accordance with Washington Mutual policy. No one at Washington Mutual had bothered to read the mortgage agreement (the legal agreement binding the parties). Instead the letter stated that payoffs had to be preceded by paying $75 for a “payoff quotation” and must be made by wire transfer and other terms which were obviously made to increase the profitability to WMU which had no basis in the legal agreements.

Since WMU had no legal basis for its demands, I stopped paying my mortgage. Within three months my credit score had been lowered 300 points, all of my credit cards were canceled (I never kept a balance on any card) and I was receiving daily harassing collection calls. Eventually, I sent a couple of letters to the WMU General Counsel’s office and began to work towards a class action lawsuit. Despite this, it took another three months to get someone’s attention at WMU who could put two and two together and I finally received a call and letter from a senior attorney who agreed to forgive thousands of dollars in interest, put a person full time on restoring my FICO score etc etc. and fix the problems that never should have occurred.

The point is that the securitization industry 5-10 years ago made a collective choice to ignore the terms of contracts, state and local laws and legal conventions developed over hundreds of years. Why? Because they could. Our legal system and conventions were built on the assumption that most businesses would choose to follow them. Instead, the securitization industry simply developed a cost/benefit approach to following the law and adhering to contracts. It worked quite well because most individuals just aren’t equipped to read and enforce their mortgage agreements or fully understand the law.

This is why the banks are fighting so hard against the Consumer Financial Protection Agency. The CFPA will have the ability to level the playing field and thus change the economics of banks simply ignoring laws, contracts and convention.

Note this mess got resolved only because the consumer in question was an attorney, and he still had to threaten a class action suit to get the servicer’s attention. And even then, it took months to clear matters up, and completely trashed his credit score in the meantime, resulting in the loss of ALL his credit cards.

How many people can afford that? Seriously. For instance, if you need to rent cars or stay in hotels in your line of work, and either your company does not provide you a corporate credit card, or you are self employed (business credit is based on your personal FICO), you’d be stuck. And if you were looking for a job, many employers pull a credit report and will not consider a candidate with a low FICO.

In other words, very few people are able to contest abusive behavior and overbilling by servicers due to the hard costs (attorney’s fees) and soft ones (damage to credit score).

Update 5:20 PM: Another sighting courtesy reader i on the ball patriot:

Bank of America and Countrywide Home Loans destroyed mortgage documents, and “recreate” them by “insert(ing) data as they see fit,” to cover up their own failure to keep records – or their fraud – according to a federal RICO class action.

Article continues here.
Update 9:30 PM: Further detail from the lawyer who provided the comment at the start of the post:

To clarify:

1. I sent WAMU a personal check for the full mortgage balance in accordance with the terms of my Promissory Note.

2. WAMU returned the check -not cashed- because I had not paid the additional fees that WAMU had unilaterally imposed as a precondition to paying off the mortgage. I stopped paying because I had a legal right to do so after tendering the correct payoff.

3. Yes, I was in a position that the vast majority of consumers are not – both as an attorney and being able to live without credit of any sort for an extended period. I’m old school and never borrowed except for home mortgages.

I believe the fallout from the mass assignments (and re-assignments) is just starting from an administrative standpoint. I helped a friend this summer who had sold her house in Boston but was unable to close the sale because an earlier mortgage lender had failed to file a Deed of Release after being paid off with a refinancing a couple of years ago.

The prior lender had flipped the mortgage and had gone bankrupt. The payoff went to a lender three links down the chain and the attorney handling the refi never obtained copies of assignments or the Deed of Release from the parties. The immediate resolution was to close the current sale (a necessity given the market) and hold all of the sale proceeds in escrow until a Deed of Release could be obtained. I spent two months tracking down a senior executive from the bankrupt lender who after weeks of cajoling and ultimately legal threats agreed to sign a Deed of Release which we filed. The ironic part of it is that the executive actually had no legal right to sign the Deed of Release because the bankrupt lender had sold the loan and had no right to sign the release.

Sounds like a nightmare right? It was and would have cost my friend probably $25K to get it resolved. I know because I spoke with a couple of attorneys who are are specializing in this kind of thing – a very recent specialization caused by the increasing frequency of problems associated with the cavalier treatment of assignments by the industry.

Lastly,I would add that the reason for MERs existence is transitory. Electronic signatures are now valid in every state I believe and deed registries across the country are adopting electronic filings and records. I estimate 3-5 years before all the filings are done online.